I am implementing Fixed Assets using the declining balance method but the results are not as expected. The calculation takes NBV from the last year end instead of the last month end. This results in 12 months with the same figure spread evenly throughout the year. The expected result would be a different figure (slightly lower) each month. I tried the Amortization method but same result.
Can anyone make some suggestions.
Thank You,
RL
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Yes, unfortunately GP does a lot of things really well but there is just a bit of weakness in depreciation. If you ever need to explain how GP simulates MACRS on the tax side, I have a blog post up on that topic here - http://gp2themax.blogspot.com/2009/10/gptip42day-macrs-depreciation-in-gp.html.
The figures are close, just about $30 difference in yr 1. I will just have to explain to the client that GP will only calculate on a yearly basis.
Thanks,
RL
Understood RL but that's not the way GP does it. What is the $$ difference on an annual basis between your method and the GP method?
Thanks...... but still not quite the results I was looking for. With this method depreciation is still calculated on a yearly basis instead of monthly/period. It just that the spread of this yearly figure is now daily instead of the same figure monthly. So January, March, May etc willl have the same figures whereas the othe months with 28 or 30 days have a different figure.
Basically I would not like GP to create depreciation on a yearly basis and spread over the 12 months. It should re-calculate depreciation each month based on last month's NBV.
Below is a table of the expected results that I am not getting in GP:
| Asset cost | $10,000 | Acquisition date | 3/1/2008 | |
| Percentage | 10% | Method | Declining | |
| Date | Depreciation | NBV | ||
| Mar-08 | $83.33 | $9,916.67 | ||
| Apr-08 | $82.64 | $9,834.03 | ||
| May-08 | $81.95 | $9,752.08 | ||
| Jun-08 | $81.27 | $9,670.81 | ||
| Jul-08 | $80.59 | $9,590.22 | ||
| Aug-08 | $79.92 | $9,510.30 | ||
| Sep-08 | $79.25 | $9,431.05 | ||
| Oct-08 | $78.59 | $9,352.46 | ||
| Nov-08 | $77.94 | $9,274.52 | ||
| Dec-08 | $77.29 | $9,197.23 | ||
| Jan-09 | $76.64 | $9,120.59 | ||
| Feb-09 | $76.00 | $9,044.58 | ||
| Mar-09 | $75.37 | $8,969.21 |
The culprit is your Periodic book period. From the Help files -
Depreciation Period
Select the depreciation period. A yearly depreciation rate is calculated for each asset at the beginning of each year.
Hi Frank,
The settings are as follows:
Method - Declining balance
Averaging Convention - Full period
No switch
Book depreciation period - Periodic
What are your depreciation settings i.e. - method, averaging convention, switchover, etc.?
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