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Suggested answer

question about depreciation convention None

Posted on by 338

Hi everyone,

We have set up the depreciation convention for fixed asset groups as “None”.

When I create a new FA e.g. today with date 29.07.2020 and make  an acquisition transaction with 29.07,then the depreciation run date is set automatically as next month, 1.08.2020.

So the first depreciation will be in august.  

 

Is that correct for this depr.convention, that the depreciation starts from the next month?

MS Documentation says actually for convention “None”,  that Assets start to depreciate on the Placed in service date.

In my case the placed in service date is 29.07.2020. But depreciation still starts only from august for some reason.

Other relevant setup - depr.profile is set a linear monthly(Straight line life remaining method with  monthly period frequency).

Thank you in advance!

Best regards

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: question about depreciation convention None

    Hi Jule,

    If the date when the depreciation was run last is set to 31 July then I would expect that the next depreciation is run in August. In your case on 31 August, which seems ok to me.

    What did you do with the acquisition date subsequently? Did you change it to 20 August?

    I cannot see a bug in what you describe but I cannot fully follow what settings and postings have been made and when. Maybe you can share those details in a chronological order?!

    Best regards,

    Ludwig

  • JuleWergne Profile Picture
    JuleWergne 338 on at
    RE: question about depreciation convention None

    Hello Ludwig and all,

    sorry for delay, I just came after vacation.

    I checked once more one FA as an example:

    * Placed in service date - 12.07.2019

    * Acquisition date - 12.07.2019

    * Depreciation run date - 1.08.2019

    * Date when depreciation was run last - 31.07.2020

    The first depreciation  ran on 31.08.2019, not 31.07.2019 as I would expect.

    I think, we have some bug in the system: I tested now creating a new FA - the depreciation run date is set automatically by the system as 1.09.2020.

    Then I acquired that FA with date 20.08., so acquisition date and placed in service date are set as 20.08.2020.

    Depreciation run date stays still as 1.09.2020 and I cannot change it: when i try to change it as 1.08.2020 and save it, the system sets it altogether as 1.09.2020.

    This is wrong, isn't it?

    Best regards

    Jule

  • Suggested answer
    Junaid Idrees Profile Picture
    Junaid Idrees 12,740 on at
    RE: question about depreciation convention None

    Hi Jule,

    That is absolutely correct. If depreciation convention is set no "none", An asset will start depreciating from the date it is placed in service. As ludwig also suggested, please make sure on your value model:

    1. Acquisiiton date and Placed is service date are same or not. In your case it should be "29.07.2020"

    2. Check Depreciation run date also, it should be "29.07.2020"  

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: question about depreciation convention None

    Hello Jule,

    Is there any other information/help that you need from the community in regards to this issue?

    Best regards,

    Ludwig

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: question about depreciation convention None

    Good morning Jule,

    Have you been able doing some additional checks on that?

    Do you need any other help from the community?

    Would be great if you could keep us updated.

    Many thanks and best regards,

    Ludwig

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: question about depreciation convention None

    Hello Jule,

    As you mentioned, I would expect to see some depreciation amounts for 29/30/31 July.

    Yet, there are some additional factors that might impact this.

    Can you check what has been entered in the following date fields in your value model?

    * Depreciation run date

    * Date when depreciation was run last

    * Placed in service date

    * Acquisition date

    I would expect that there must be 01 Aug 2020 specified somewhere.

    Many thanks and best regards,

    Ludwig

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