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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Half year convention n...
Small and medium business | Business Central, N...
Answered

Half year convention not calculating properly in Dynamics 365 Business Central

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Posted on by GaryH1 10

I'm a new user trying to understand how Business Central calculates depreciation with a half year convention.   We have a 9/30/20 year end, and it's giving me a calculated depreciation amount of $1,218.27 for July to Sept on the asset below.  But it should be $1,333.33 ($8,000 times 6 months / 36 months).

Acquisition Date - 7/1/20

Acquisition Value - $8,000

Asset Life - 3 years

Any ideas?

Thanks,

Gary

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  • Verified answer
    Dirk Profile Picture
    Dirk Microsoft Employee on at

    Hi Gary,

    I do get 1,333.33  ...  if I set the Depreciation Ending Date 31.03.23 (2.75 years).

    see here:

    docs.microsoft.com/.../fa-depreciation-methods

    ...

    When you apply the Half-Year Convention, a fixed asset has six months of depreciation in the first fiscal year, regardless of the contents of the Depreciation Starting Date field.

    The estimated life of the fixed asset that is remaining after the first fiscal year will always contain a half-year using the Half-Year Convention Method. Thus, for the Half-Year Convention method to be applied correctly, the Depreciation Ending Date field on the FA Depreciation Book page must always contain a date which is exactly six months before the final date of the fiscal year in which the fixed asset will fully depreciate.

    ...

    Hope this helps

  • GaryH1 Profile Picture
    GaryH1 10 on at

    Thank you Dirk!

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