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175 percent reducing balance depreciation method is taking the acquisition price instead of the NBV

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Posted on by CU11051818-0

Hello everyone,
I'm migrating fixed assets for a project. Most assets use the "175 percent reducing balance depreciation" depreciation method.

From what I've been reading on Microsoft Learn, depreciation should be based on the net book value, but for some reason, Dynamics is depreciating based on the acquisition price.

This is a problem in my case since I'm migrating fixed assets that have already been partially depreciated, and I need the system to take the net book value into account.

Any ideas? Thanks in advance!

11528 * 35% = 4034,80

4034,80 / 12 = 336,23

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Dynamics 365 Finance

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Zain Mehmood 4,173 Most Valuable Professional on at

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175 percent reducing balance depreciation method is taking the acquisition price instead of the NBV

Hi,

The system may calculate based on the original acquisition price divided over remaining periods, which overrides reducing balance logic.

Go to the asset book and check if "Depreciation periods remaining" is set — clear it if you want true reducing balance behavior.

Ensure the "Depreciation year" setting is based on fiscal/calendar, depending on how you want depreciation spread.

Confirm the Depreciation method is set to “175% reducing balance”, not a derived/custom version.

After adjusting, run depreciation simulation to verify results.

Warm Regards,

Zain

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Abhilash Warrier 5,402 Super User 2025 Season 2 on at

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175 percent reducing balance depreciation method is taking the acquisition price instead of the NBV

Hi.

Please test & review below steps -

Import Fixed Asset Master Data

Use Data Management to import asset details such as asset ID, name, category, and acquisition date.

Ensure the "Migrated asset" flag is set to Yes to indicate that the asset was transferred from another system.

Import Fixed Asset Books

Set up the Fixed Asset Book with the correct depreciation method.

Ensure the placed-in-service date reflects the actual historical date.

Import Acquisition & Accumulated Depreciation

Post an acquisition journal for the asset using the correct acquisition cost.

Post an accumulated depreciation journal to reflect prior depreciation.

Update Asset Book for Correct NBV Calculation

Re-import the Fixed Asset Book to ensure the system recognizes the correct last depreciation date and remaining periods.

This step ensures depreciation is calculated based on the NBV rather than the original acquisition cost.

If this helped, please mark it as "Verified" for others facing the same issue.
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CU11051818-0 8 on at

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175 percent reducing balance depreciation method is taking the acquisition price instead of the NBV

@Abhilash Warrier I have tried your proposal but still the system does the same. Thanks a lot anyway !

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