Depreciation amount shows CR balance

[Shashi_k]

hi,

we have placed an Asset in DEC-09 with Life period of 4 years,

Asset value : 1000

Depreciation for the periodof Dec-09 = 20.83.

In Jan-10 the same asset life period is extended by 4 more year i.e now the asset life is 8 years

for Jan Perdiod system shows the depreciation values as -27.86 and the YTD deprecation for 20101 also shows -27.86.

Now the question is why depreciation value and YTD depreciation is showing credit amount.

What happens when we extend the life of the asset once it is placed in service and how is the YTD depreciation calculated when there is a change in the life of the asset in the running year.

How is the YTD depreciation is calculated?

Regards,
Shashi

[karthikeyanp1981]

If you could also share your prorate convention method, Depreciation Method and Prorate calendar(whether daily or monthly) i can work out the logic behind Jan 2010 as well .....

For December 2009, system did the computation as below
DPIS = December 2009
Asset Cost = 1000
Life = 4 Yrs ... or 25%

Cost * Rate of Depreciation = 1000 * 25% = 250 Per Year
Depreciation Per Month = 250 / 12 = 20.8333 which is charged for Dec 2009

Now for the Month JAN, since you have increased the life, the depreciation to be charged on a monthly basis will be low .....
So for JAN system would have recovered excess depreciation charged in the month of Dec 2009....

(I am working on the logic meanwhile ... if any luck, will update the thread ...)
Regards
Karthikeyan

[Shashi_k]

Hi Kathik,

Thnaks for your reply on this theard. Below are the some of the details of the assets hope this helps.

Prorate Convention Method ---Same Month
Depreciation Method ---STL (Straight Line)
Prorate Calendar ---Daily
Adjustment Type ---Expensed

Regards,
Shashi.

[karthikeyanp1981]

When you have made an adjustment to the Life, i guess you have made a change to the cost also. Please confirm whether the cost of the asset for the month of JAN 2010 after changing the life is also 1000 or some other figure ....
I Tried a similar test case, whereas the YTD computed by the system is different, and i was able to make out the computation logic behind it also ....

Regards
Karthikeyan

[Shashi_k]

Hi Karthik,

Asset Value remained same 1000$, I mean to say there in no change in the Asset Cost.

Regards,
Shashi.