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Dear All
We have a fixed asset that was acquired in Jan 2015. until now it was not recorded. Now we need to record it and also not affect the previous years' balances.
What is the recommended practice or the correct approach? I want to record the depreciation in the Financial year 2020 for the previous years.
How can I achieve it?
All inputs are welcome
Thanks in Advance
Dear Osman
Sorry for not replying as I was exchanging with Ludwig and my problem was different but yes I had already tried it.
Thanks for replying
Dear Dr. Ludwig.
Before you answered I tried the solution with acquisition transaction in 2020 and also created the depreciation adjustment journal in 2020 and also created the depreciation journals for 2020. All seemed fine but when I created the depreciation journal for December 2020 the amount was not as expected. The reason I found after reading your answer. "I forgot about the depreciation periods, they too needed to be deducted for the same period i.e. 59 months".
This is what I call experience thanks a lot bro
Regards
sayyed
That's what I would go for.
When doing that please ensure that you adjust the remaining depreciation periods in your fixed asset books (value models).
Things should work fine then.
Best regards,
Ludwig
Dear Dr.Ludwig
You are the right entry. The expense account for the group i.e. bldg namely depreciation expense for bldg
I am stuck on the question about the acquisition. if I create a transaction in 2015 (supposedly I open the period) that wouldn't work too. as I will have to re-run closing for all the years which is illogical. The other option would be to show the acquisition transaction in 2020 then create the adjustment entry for the depreciation up to 2019 but not sure how the system will behave. I will update you once i do it on the test environment
regards
sayyed
Hi Sayyed,
So, the depreciation up to 2019 should look like:
DR: Equity account (Balance Sheet)
CR: Expense account (P&L Account)
Is that right?
If so, what expense account do you plan to use?
About the asset acquisition posting:
How do you plan to create the transaction in 2015 (transaction date)?
That shouldn't work if 2015 is already closed/on-hold.
Best regards,
Ludwig
Dear Dr. Ludwig
thanks for the reply
The depreciation up to 2019 should be dr the previous year's profit account and cr expense account for the asset group. When I do the depreciation for the asset it will go to the default setup accounts. Do I need to make the entry for adjustment in GL then only create the current year depreciation in the FA module? One more thing the asset acquisition is of Jan 2015 I am creating the transaction in 2020 and choosing Jan 2015 as the transaction date. will this affect the balances for 2015? If yes what is the correct way to record this asset
Right and you want to have a single line for all of the years posted?
If that is the case then you don't need to run the proposal but can manually enter the single line with the amount to be depreciated.
Dear Dr. Ludwig
you are right but when I created the proposal by selection summarize parameter, I am getting one line for each year otherwise I get one line for each month.
Hello sayyed ar,
When you created the depreciation proposal have you selected the summarize depreciation parameter? This should ensure that you get only a single line only for the whole depreciations from 2015 onwards.
Best regards,
Ludwig
Thanks again Dr. Ludwig
1) The acquisition date will be the same i.e Jan 2015
2) The depreciation from Jan 2015 to Dec 2019 will be should be posted to DR Account Name: Profit and Loss for Precious Years and Cr
Expense Account for the Asset.
3) No taxes
4) Yes the asset has the Financial Dimensions for the Acquisition as well as the depreciation.
As per your suggestion, I created the asset and also created the acquisition journal. but when I create a depreciation proposal then the depreciation created shows dates for years from 2015, 2016 .. up to Nov 2020 the date I choose to depreciate up to.
I want to create one entry that will not only update the Depreciation last run date but also post in proper accounts.
Regards
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