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FA depreciation Reducing Balance Method

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Hi All,

Do we need to define service life for the books with reducing balance % depreciation profile?

What is the purpose and what would be the impact if service life is not entered?

Regards,

Nakul

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MATTGUO 22,349 Moderator on at

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Hi,

Need to define the service life.

When you set up a fixed asset depreciation profile and select 125% reducing balance in the Method field in the Depreciation profiles form, the depreciation of fixed assets that are assigned to this depreciation profile is by the same percentage in each depreciation period. The percentage will be calculated based on the service life of the asset. For example, if an asset has a service life of five years, the percentage will be calculated as 25% (125% / 5).

Please have a look at the Doc: docs.microsoft.com/.../about-125-percent-reducing-balance-depreciation

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saurabh bharti 15,039 Moderator on at

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Hi Nakul,

When you select only "Reducing Balance", than not req to setup service life because system will post depreciation based on selected frequency because system will automatically determine the service life by specified service life. E.g. if you define 20% that means asset will be depreciated for 5 years.

but if you use other reducing balance method e.g 200 % reducing balance. 125 % reducing balance etc... than you need to define the service life to dervie depreciation percentage. As mention in other thread given in answer.

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Ludwig Reinhard Microsoft Employee on at

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Hello nakul waghe,

Did you receive an error message when using the reducing balance % depreciation profile?

Best regards,

Ludwig

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Community Member on at

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Hi All,

Thanks everyone, I generally have reducing balance percentage for 4% to 100% and these will be mainly used for reporting purpose so I am using posting layer - None (No GL Posting) and will be a derived book of SLLR book.

@Ludwig, No I didn't get any error while running the depreciation.

Regards,

Nakul

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