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Depreciation for an addition to an asset that is fully depreciated

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Posted on by PK-29011343-0

How do I

a) add an addition to an asset that is fully depreciated/almost fully depreciated, so it does not adjust the cost of the asset used in depreciation calculation

b) run a proposal for depreciation for the asset and get it to calculate the depreciation correctly, just using the cost of the addition only and or what is left of the existing asset

I have tried to use acquisition adjustment journal for additions, but this adds the addition to the cost and depreciation is calculated using the new total costs.

Thanks

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Dynamics 365 Finance

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Frank Hamelly | MVP... 46,625 Super User 2025 Season 2 on at

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If you don't want to affect the cost of the existing asset, wouldn't it make sense to create a new asset for the addition? You want be able to depreciate the existing asset further if its basis isn't adjusted.

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PK-29011343-0 16 on at

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Creating a new asset would not make sense in this case, the option was explored.

So for example, building 005, almost fully depreciated in 2024, we do an expansion in 2024, which is recorded as an addition to the existing building of 600K.

How should the addition be added to the existing asset so that depreciation is calculated accordingly.

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Bharath jain 1,443 Super User 2025 Season 2 on at

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Hello,

Below is the standard behaviour for straight line method.

1) Acquisition (10,000) was posted as on June 1st 2024 (life of an asset 1 year) and depreciation is posted till May 31st 2025 833.33 monthly

2) Acquisition adjustment of 5,000 was posted as on May 31st 2025. Now the depreciation is calculated on the new cost of 5,001

Kindly explain if your expecting something different.

Regards,

Bharath Jain

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PK-29011343-0 16 on at

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thanks Jain, this is what I expect but somehow I am not getting that. Did you have to make any changes to depreciation book?

Here is a screenshot of transactions. I have hidden depreciation from 2022 and 2023. I have the nbv before adding the addition.

The next depreciation on 10/5/2024 should only be depreciation of 50K plus the remaining NBV, but it is not. Please help!

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Bharath jain 1,443 Super User 2025 Season 2 on at

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Hi,

I have tested in standard environment in version 41, there is no additional setup required for that. I have just acquisition adjustment and verified the depreciation calculations.

1. can you check which version your working

2. Any customization

3. Have you applied any depreciation convention. I have used None

Regards,

Bharath Jain

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BillurSamdancioglu 19,856 Most Valuable Professional on at

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YOu can use the type for deprecıatıon adjustment type to post the journal.

Then you need to manually edıt the fıeld of how long ın moths there ıs to be deprecıated.

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PK-29011343-0 16 on at

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Thanks Bharath for your response

I am on version 41. I don't believe we had any customizations, but I will double check that as well as the depreciation convention.

Barath Jain, can I schedule a meeting so you can walk me through the steps. I have tried everything, and it is not working

There were no modifications made to the FA module.

Based on d365 procedures provided, 'fixed asset addition' is for tracking additions only, information only. It does not have any guidance on how to add fixed assets and how to adjust depreciation. Is there any other documentation site with more information on this topic?

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