Extension of the depreciation period

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Posted on by IA-15041016-0

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Hi all ,

I have an issue: there's a fixed asset that was acquired on 01/01/2020 for €100,000, depreciated over 10 years (straight-line). In 2020, this asset should normally be fully depreciated. However, the company incurred additional costs in 2020 that should be capitalized into the asset’s value, increasing it by €10,000. As a result, the depreciation period is extended by 2 years.

How should this case be handled in Dynamics 365 Finance & Operations (D365 F&O)? Can someone help me, please?

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André Arnaud de Cal... 299,576 Super User 2025 Season 2 on at

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Extension of the depreciation period

Hi,

Can you clarify if there is a typo in your dates you used in your example? E.g. was the asset acquired in 2000 instead of 2020?

Anyway, in case you are using straight line - life remaining, you can extend the number of periods remaining and it will calculate the depreciation amount based on the actual value divided by the number of periods remaining.

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Yng Lih 1,531 on at

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Extension of the depreciation period

Hi,

I think there is a typo in the dates... I assume you want to know how to extend the depreciation.

Increase Asset Value: Post the additional incurred costs (€10,000 in this case) to the fixed asset as adjustment transaction. This updates the asset’s book value.
Adjust Depreciation Schedule: Change the useful service life of the asset to reflect the new total period (original 10 years + 2 years extension = 12 years) and depreciation periods remaining. You can do this by manually updating the asset’s Books > depreciation parameters.

Recalculate Depreciation: System will recalculate the remaining depreciation based on the updated asset value and new useful life.

If this information was helpful, kindly mark it as 'Verified'. Thank you. :)

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Cyrille Nembot 149 on at

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Extension of the depreciation period

In Dynamics 365 Finance & Operations (D365 F&O), this scenario
can be handled by first capitalizing the additional €10,000 costs to the
fixed asset using the "Value models" feature. Navigate to Fixed Assets > Common > Fixed Assets > Fixed Assets, select the asset, and post the additional acquisition cost via the "Acquisition adjustment" transaction. Next, adjust the depreciation parameters by extending the remaining useful life. Go to the "Depreciation profiles" for the asset and update the "Service life"
from the original 10 years to 12 years (or adjust the remaining life
accordingly). Since the asset was fully depreciated in 2020, you may
need to reverse the last depreciation entry (if posted) before applying
the adjustment. Finally, recalculate depreciation using the "Propose depreciation"
function to ensure future depreciation reflects the extended period and
revised book value. This ensures compliance with accounting standards
while maintaining accurate asset records in D365 F&O.

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IA-15041016-0 197 on at

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Extension of the depreciation period

Thanks for your reply. That applies when I create the asset manually. However, I have another question, please:

In the case of a data migration for a client, they have multiple assets acquired in different years — for example, 1996, 2000, etc. During the ERP migration, the client does not want to migrate all historical transactions starting from those original acquisition dates. Instead, we will only enter the asset balances as of 31/12/2024.

The issue is: when I import these assets, their status remains "Not Acquired", and I can't change this status unless I enter a transaction.

How should I handle this scenario?

For example, if an asset was acquired in 2015 with a useful life of 20 years, by 31/12/2024, it should have 10 years of depreciation already booked and 10 years remaining. In this case, we plan to enter only the ledger transactions reflecting the remaining depreciation. How can we properly set up the asset in the ERP so that it reflects the correct acquisition and depreciation status without entering all historical transactions?

@André Arnaud de Calavon @Yng Lih @Cyrille Nembot

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André Arnaud de Cal... 299,576 Super User 2025 Season 2 on at

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Extension of the depreciation period

Hi,

You are now changing the topic of your original question, where you already verified the replies. Please create a new post for a new question to avoid confusion about the topic and the status of the question.

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