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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Fixed asset disposal a...
Microsoft Dynamics AX (Archived)

Fixed asset disposal and depreciation adjustments

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Posted on by MrAxapta89

Hi All,

I have a question in regards to how depreciation adjustments are calculated by the system. The fixed asset in question was placed in service on 10/1/13 and the acquisition date is 12/1/13.  In this example the depreciation per month should be -$9.37. The depreciation for the previous 2 months, -$18.74, shows up as a depreciation adjustment when the depreciation process is run on 12/31/2013. My understanding is that this amount of $18.74 should show up as "depreciation" instead of "depreciation adjustment". The issue here is that when we disposed of the fixed asset on 12/2/2014, the depreciation adjustment amount is not calculated in the profit/loss. The loss on this asset is -$120.59 when it should actually be -$139.33 (120.59+18.74). In the transactions screen it looks to me that the depreciation from previous years is "reversed". Can anyone please help me understand how depreciation adjustments work and why this is not included in the profit/loss?

(We are using AX 2012 R2 RTM)

Thanks in advance for your continued help!

*This post is locked for comments

  • Verified answer
    Daxer Persson Profile Picture
    Daxer Persson on at
    RE: Fixed asset disposal and depreciation adjustments

    By time of disposal the transactions have been : 251-9,37-18,74-11*9,30.

    This gives a net value of 120,58 which is the same calculated in your screen (except for rounding issue). Seems ok to me ?

    The transaction type of Depreciation adjustment is because depreciation starts before acquisition date. Not sure why AX wants to state this as depreciation adjustment rather than just depreciation.

  • MrAxapta89 Profile Picture
    MrAxapta89 on at
    RE: Fixed asset disposal and depreciation adjustments

    Hi Daxer,

    Thanks for your response. After recalculating you are correct $120.58 does seem to be the correct amount for P/L. It was confusing to me because it was showing up as a depreciation adjustment rather than standard depreciation. Does anyone know why it shows up this way? Is there some parameter that I can choose to ensure that this will show not show up as an adjustment in the future?

    Thanks again Daxer!

  • Verified answer
    Daxer Persson Profile Picture
    Daxer Persson on at
    RE: Fixed asset disposal and depreciation adjustments

    The transaction type of Depreciation adjustment is because depreciation starts before acquisition date (so if depreciation starts after acquisition there will only be depreciations).

    There is no parameter for changing this.  

  • lally Profile Picture
    lally on at
    RE: Fixed asset disposal and depreciation adjustments

    Hi Daxer ,

    Can i know one thing Ax calculates the depreciation based on the placed on service date or acquisition date  ?

    How the placed on service date is prior to acquisition date ? Why we need to maintain like service date is prior to acquisition date for an asset ?

  • Community Member Profile Picture
    Community Member on at
    RE: Fixed asset disposal and depreciation adjustments

    This scenario is needed in Opening Balance for the system, as you need to upload the Fixed Assets master data with it's placed in service date to verify that that the Acquisition Value, NBV, and Accumulated Depreciation balances are as correct as GL CoA opening balances.

  • Community Member Profile Picture
    Community Member on at
    RE: Fixed asset disposal and depreciation adjustments

    Placed in service date also needed, when you purchase an asset and you will use it in a future date.

    e.g:- A server is purchased on 1/1/2016, but you will start using it on 3/31/2016.

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