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Automatic Depreciation Calculation for Migrated Fixed Assets

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Posted on by Olafsonn 28
Hi everyone, 
 
I have a question which someone might dealt with situation similar to mine, regarding the data migration process concerning fixed assets. Specifically,
 
I am seeking clarification on the calculation of depreciation proposals for migrated assets, in scenarios involving acquisitions and accumulated depreciation journals which are posted. Allow me to provide an example. Let's consider an asset is acquired in 01.01.2002, but in our company we have only fiscal calendars which starts from 2023. In this case for the acquisition posting we are using 31.12.2023, setting the migrated asset tick to yes. In this case we leave the placed in service field to blank and run depreciation to blank. In the acquisition date field we put 01.01.2002 so we can have the historical information of the asset. My question is in this case, how the system will generate the depreciation proposal, based on what? Based on the depreciation periods remaining which we filled during the FA Book migration or based on the acquisition date? We have successfully matched the net book value of the asset with the previous system, the only issue is the depreciation proposal. 
 
Did anyone faced/is facing similar issue?
 
Thank you very much!
 
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  • Verified answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 290,339 Super User 2024 Season 2 on at
    Automatic Depreciation Calculation for Migrated Fixed Assets
    Hi Olafsonn,
     
    Usually, I use almost the same approach as mentioned by Bharath, but with a different order in importing and posting the cumulative depreciation amount.
    My steps are (first perform it in a test environment, then production)  
     
    1. Import the fixed assets master
    2. Import Fixed assets book with the actual acquisition date and placed-in-service date
    3. Import Fixed assets acquisition transaction > check and post the journal.
    4. Import the accumulated depreciation > check and post the journal.
    5. Import the asset book again (This is to make sure the acquisition date is updated correctly, but also it will set the correct last depreciation date and the remaining number of periods).
     
    After that create a new test asset depreciation journal and check if the depreciation amounts are correct. Most important are the remaining periods and the last depreciation date for the depreciation proposal.
    Note that if you are using a straight line, there are two different types. Straight line and remaining straight line. The first option will calculate the depreciation amount based on the original acquisition value and expected scrap value + total periods. The remaining life option is calculated based on the actual book value and the remaining number of periods. In several cases where we have some rounding differences or unexpected outcomes, the second mentioned type solved the issue.
  • Suggested answer
    Bharath jain Profile Picture
    Bharath jain 629 on at
    Automatic Depreciation Calculation for Migrated Fixed Assets
    Hi,
     
    You can upload Fixed assets with original acquisition date and accumulated depreciation to maintain the historical data. 
     
    Example: Asset is acquired on 14/11/2019 and depreciation is posted till 31/08/2023 in legacy system. As on August 2023 I want to import this to new system, if I follow the below steps while uploading,  I can see the fixed asset with acquisition date  and placed in service date as 14/11/2019. Accumulated depreciation will be posted till 31/08/2023. 
     
    From September 2023 you can run depreciation proposal and system will calculate depreciation based on net book value.
     
    Steps: 
     
    1. Upload the fixed assets master
    2. Update Fixed assets book with actual acquisition date and placed in service date
    3. Upload Fixed assets acquisition transaction
    4. Upload the asset book again (This is to make sure acquisition date is updated correctly)
    5. Upload the accumulated depreciation 
     
    Regards,
    Bharath Jain.
     
     
  • Suggested answer
    saurabh bharti Profile Picture
    saurabh bharti 14,978 Super User 2024 Season 2 on at
    Automatic Depreciation Calculation for Migrated Fixed Assets
    Hi,
     
    I think you should enter the acquisition date same as 31-12-2023 and add remaining periods for calculation
     
    Once you post Accumulated depreciation on 31-12-2023 , from 31-01-2024 it will calculate based on depreciation method e.g. Net book value / reminaing number of period in case staright line method
  • Suggested answer
    Frank Hamelly | MVP, MCP, CSA Profile Picture
    Frank Hamelly | MVP... 3,838 Super User 2024 Season 2 on at
    Automatic Depreciation Calculation for Migrated Fixed Assets
    The system will calculate depreciation based on the net book value of the asset at migration and remaining periods.  This is a very common scenario when migrating fixed assets from a legacy system.

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