Fixed Asset -> Declining Balance 1

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I created an Fixed Asset with the following book value ($1500), depreciation method is declining balance 1, with declining balance % = 4. However, in the first year, the calculated deprecation should be 50% of the book value ($750) and afterwards, it should depreciate be 4% every year.

How can I set this up.

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Community Member on at

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I am using NAV 2009 R2.

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Aleksandar Totovic 16,765 on at

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Thhis is impossibly with Declining Balance 1 method. This is an accelerated depreciation method that allocates the largest portion of the cost of an asset to the early years of its useful lifetime, but if you use this method, you must enter a fixed yearly percentage, and this is not the case.

Only you can do is a User-Defined depreciation method. With a user-defined method, you can use the Depreciation Tables, where you must enter a depreciation percentage for each period (month, quarter, year or accounting period).

You need setup period on header, and after that you nid to fill lines by periods with depreciation. In this case, you must to fill period-1 and 50% period-1 depreciation; after that you must fill other periods and 4% as other period depreciation.

On FA card, you need to setup User-Defined as Depreciation Method and fill your Depreciation Table Code.

I think, this is that what you're looking for.

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Thanks for the prompt reply.

But I have a question. The asset will never have a book value of 0 since its is going to be depreciating by 4% ever year. It will come very close to 0, but it will never be 0.

How can I set the yearly periods to depreciate the value of the asset by 4% for life. Is there a smarter way of doing it rather than, creating a ridiculous no. of periods.

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Aleksandar Totovic 16,765 on at

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This method does'n work as declining balance. It already work as Straight-Line method. You will write off depreciation amount as percentage of Acquisition Cost. If this principle is not good enough, only what you can is to calculate percentage for each year. This is only possible to be done with the standard NAV solution.

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Lets say the Fixed Asset is a building. So, it depreciates by 50% in the first year and after that it should depreciate by 4% for subsequent years. So, the amount is never ever going to be 0 unless the asset is disposed off. So using the user-defined method there is no way to telling the system to keep depreciating the asset for forever. Rather than having a huge number of period (i.e like Period 200 and each period is going down by 4%).

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Aleksandar Totovic 16,765 on at

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As I say, user-defined method doesn't work as declining balance. This method work as straight-line method, but allow different percentage per different period. It can work in once another way, but it is not what you want.

If the system must work on the this principle (declining balance), I recommend some custimization of this functionality.

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Saulius_DNB 5 on at

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Hello,

Split fixed asset acquisition cost into two FA components (in your case by 750/750) using FA reclass. journal standard functionality,

Then setup db1 =99.99% for first component and db1 =4% for the second component.

Change for the second component starting depr. date to + 1Year .

Both FA components should be assigned to the main fixed asset (after reclasification main asset book value will stay =0)

BR,

Saulius

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