53 Set Up Depreciation Account Rules
This chapter contains the topic:
Depreciation account rules are links between the cost accounts for your assets and the depreciation accounts that hold the accumulated depreciation and depreciation expense amounts. They also specify how you classify your assets when you first enter the assets into the system. This ensures both simplified asset creation, and more accurately controlled posting of your depreciation amounts. When you run your depreciation calculations, the calculation programs refer to these rules to determine to which accounts depreciation amounts are to be posted.
53.1 Setting Up Depreciation Account Rules
From Fixed Assets (G12), enter 29
From Fixed Asset System Setup (G1241), choose Depreciation Account Rules
You can make depreciation rules date-sensitive. For instance, if you decide that all depreciation for a particular class of assets, heavy equipment, must be posted to different accounts after January 1, you can set up a new rule with an effective date of January 1 and the depreciation will be properly posted thereafter for all your heavy equipment. Depreciation account rules are made up of the following:
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Effective dates
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Depreciation accounts
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Accounting class
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Equipment class
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Revenue accounts
Caution:
You must set up depreciation account rules for every asset cost account in every company. Ensure that you set up depreciation account rules for any new cost accounts or companies that you add to your system at a later time. If you make any changes to depreciation account rules, you should verify that the values are correct before you enter new asset master records.To set up depreciation account rules
On Company Depreciation Account Rules
Figure 53-1 Depreciation Account Rules screen
Description of "Figure 53-1 Depreciation Account Rules screen"
Complete the following fields:
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Company Number
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Asset Cost Object
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Asset Cost Subsidiary (if applicable)
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Effective From Date
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Effective Through Date
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Accumulated Depreciation Account
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Depreciation Expense Account
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Depreciation Subledger Derived
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Major Accounting Class
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Major Equipment Class
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Revenue Credit Account
| Field | Explanation |
|---|---|
| Company Number | A code that identifies the company that owns or is assigned to an asset or group of assets. You set up companies in the system to represent a reporting level that has a complete balance sheet and any intercompany transactions with other companies. You can define a specific organization, entity, partnership, and so on, as a company. You use Company Numbers and Names to define the companies in your system.
Note: Use Company 00000 only for default values, such as dates and Automatic Accounting Instructions (AAIs). You cannot use Company 00000 when entering transactions. |
| Asset Cost Object | The general ledger account (object number) used to record a fixed asset's acquisition cost. Within each company, you define default coding instructions for asset cost accounts. Then, based on these default codes, when you set up a new asset, the system automatically assigns the following:
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| Asset Cost Subsidiary | The subsidiary account used in conjunction with the asset cost account. |
| Date - Beginning Effective | The date on which an address, item, transaction, or table becomes active or the date from which you want transactions to display. The system uses this field depending on the program. For example, the date you enter in this field might indicate when a change of address becomes effective, or it could be a lease effective date, a price or cost effective date, a currency effective date, a tax rate effective date, and so on. |
| Date - Ending Effective | The date on which the item, transaction, or table becomes inactive or through which you want transactions to display. This field is used generically throughout the system. It could be a lease effective date, a price or cost effective date, a currency effective date, a tax rate effective date, or whatever is appropriate. |
| Accum Depre | A field that identifies an account in the general ledger. You can use one of the following formats for account numbers:
The first character of the account indicates the format of the account number. You define the account format in the General Accounting Constants program. |
| Depre Expense | A field that identifies an account in the general ledger. You can use one of the following formats for account numbers:
The first character of the account indicates the format of the account number. You define the account format in the General Accounting Constants program. |
| Depre Subl Derived | Depreciation Expense Subledger Rule:
Blank or 1 - Same as Cost Subledger 2 – Responsible Business Unit 3 – Location Business Unit 4 – "Employee" Address Book Number 5 – "Tax Authority" Address Book Number 6 – Authorization for Expenditure (AFE) Number |
| Major Accounting Class | A user defined code (12/C1) that determines the accounting class category code. You use this accounting category code to classify assets into groups or families, for example, 100 for land, 200 for vehicles, and 300 for general office equipment.
JD Edwards World recommends that you set up major class codes that correspond to the major general ledger object accounts in order to facilitate the reconciliation to the general ledger. Note: If you do not want to use the major accounting class code, you must set up a value for blank in the user defined code table. |
| Major Equipment Class | A user defined code (12/C2) that is used to classify assets into groups or families. You use the equipment category code as a subclass to further define the accounting class, for example, 310 for copy equipment, 320 for projectors, and 330 for typewriters within the accounting class for general office equipment.
Note: If you do not want to use the major equipment class, you must set up a value for blank in the user defined code table. |
| Revenue Credit | A field that identifies an account in the general ledger. You can use one of the following formats for account numbers:
The first character of the account indicates the format of the account number. You define the account format in the General Accounting Constants program. |