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Requirements to change calendars from one type to another are fairly common these days and impose certain challenges in regards to Fixed Assets. Below are some guidelines that can make your calendar conversion a success.
Timing:Ideally, you would be able to make the short or long calendar year prior to running depreciation in that year. In this scenario you can run the Fixed Assets Year End as normally done and then run depreciation in the short or long year.
If depreciation has already been run in the year that will be converted to a short or long year, steps need to be taken to avoid incorrect depreciation values. Below are examples of a short and long year where depreciation has been run.
Short Year Example 1 – Depreciation in the short year. Calendar is currently 7/1/2011 to 6/30/2012, but the required calendar is 1/1 – 12/31. So the new calendar is as follows:
o 2010 7/1/2010 -6/30/2011
o 2011 7/1/2011-12/31/2011 (short year)
o 2012 1/1/2012-12/31/2012
Depreciation has been run somewhere between 7/1/2011 and 12/31/2011 before the calendar modification.
In the above scenario the following would be recommended:
Short Year Example 2 – Depreciation past the short year. Calendar is currently 7/1/2011 to 6/30/2012, but the required calendar is 1/1 – 12/31. So the new calendar is as follows:
Depreciation has been run somewhere between 1/1/2012 – 6/30/2012 before the calendar modification.
At this point you should be able to continue depreciation into the 2012 year.
Long Year Example 1 Calendar is currently 1/1/2010 to 12/31/2010, but the required calendar is 7/1 – 6/30. So the new calendar is as follows:
o 2010 1/1/2010-12/31/2010
o 2011 1/1/2011-6/30/2012 (long year)
o 2012 7/1/2012-6/30/2013
Depreciation has been run somewhere between 1/1/2011-12/31/2011 before the calendar modification.
Long Year Example 2Calendar is currently 1/1/2010 to 12/31/2010, but the required calendar is 7/1 – 6/30. So the new calendar is as follows:
The Fixed Assets Year is 2012 and depreciation has been run between 1/1/2012 and 6/30/2012
It is very important to note that in all of the above scenarios. I would recommend that we get the live data into a test company and thoroughly test the calendar change and solution to confirm that the correct depreciation figures come out.
Known Issues:There is a known problem with any additions in the short years when the following conditions are true: