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Dear All,
I have a case that I need to extend an asset life starting from the mid of current year with out affecting any old depreciation data for this asset because we need this extending of asset life to affects only starting from time we changed the life.
How can I do this and keep the same asset id.
Thank You.
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Also, as suggested, I tried to the drop down Straight Line Remaining Life and it still depreciated only until 2018, but more evenly:
2016 $178
2017 $178
2018 $178
Dear All,
I am having a similar issue, we just extended our new building lease and I need to update the amortization of the Leasehold improvements in GP. We extended the lease by 6 years.
I thought it would be an easy fix by increasing the Original Life Years/ Day by 6 years (there were only 245 Remaining Life Days).
For example, Asset 6000 had a net book value of $4,275.01 and was placed into service 3/1/12 and had an original life of 4 years - 306 days. The remaining life was 245 days. I changed the Orig Life/Days to 10 years - 306 days. (And clicked on "Recalculate") It showed a remaining life of 6 years - 245 days (exactly what I wanted). Then I tested it out in the depreciation projection and it fully depreciated it in 3 years:
remainder of 2016 $88.85/ month
2017 - $237.36/month
2018 - $59.66/month
What am I doing wrong?
Thanks,
Susan
Hi Heather
When click Recalculate option, nothing will happen with the previously calculated depreciation. Depreciation will be calculated based on the new changes moving forward.
Reset Year option recalculates previous depreciation at the beginning of the year (Current Fiscal Year of the Book) thru to the current depreciation run. Adjustments will be made that need to be posted to General Ledger.
Reset LIFE option recalculates previous depreciation at the beginning of the asset life thru to the current deprecation run. Adjustments will be made that need to be posted to General Ledger.
Note: You might need to be careful running Reset LIFE though especially if the asset was added with LTD Depreciation amount as this will be removed and system will recalculate depreciation based on your new Net Book Value and Asset Life.
Hi Mahmoud
We may need some more info from you on this. This doesn't seem like it is doing the right thing.
When you click Recalculate, it actually recalculates the current year's depreciation based on the changes, will take off what it already posted and spread the remainder for the rest of the year.
In your example, if my sums are right, prior to making the change, your monthly depreciation rate was $215,715.58 - annual rate $2,588,586.
After the recalculate, you are expecting them to be $179,762.98 for the remainder of the life - annual rate $2,157,155.
So, if you had already processed say 5 months depreciation, you would already have $1,078.575 posted and only need another $1,078.580 - which would mean $154,082 per month for the rest of the year. Then next year, it would post $179,762.98.
Now there are other impacts to depreciation calculations - depreciation method, averaging convention.
I would suggest that to get the result you are after, you would need to use SL Remaining Life.
If you can give us these details, we may be able to better advise:
Original cost
Place in Service date
Averaging Convention
Depreciation method
FA Year End date
Cheers
Heather
Hello Mahmoud,
Kindly be informed that I changed the asset life from 5 years to 6 years and 5 months then I choose the option of "recalculate" but I didn't get the required results.
the "Net Book Value" off the asset before extending it's life was (7550045.16)
After extending the asset life the "Net Book Value" off the asset before extending it's life was (7550045.16) and the "Remaining life" is 3 years and 6 months so the expected monthly depreciation is (179762.98) but I got this value(541390.73) which is not the right value?
So what is wrong thing I do or what I misunderstand about the asset reset options.
If you need more info about this asset kindly inform me.
Thank you very much for your help.
Hello Mohamed,
Thank you very much for your reply.
I will try the "Recalculate" option and update you.
Thank you.
Hello Mahmoud
You may change the cost basis of the asset, which will in turn trigger the "Recalculate" options of the Fixed Assets module to be initiated. The options include:
There is a lot to explain about these options, but in brief the "recalculate" option will limit the change to be considered for the asset at the next time a depreciation is started. The year will recalculate the current open year while the "Life" option will recalculate the whole asset life since it was initially acquired.
Here is a comprehensive reference that could be consider for further illustrated: Weekly Dynamic: What REALLY happens with FA Recalculate
Your feedback is highly appreciated,
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