4 Verify Depreciation Information
This chapter contains the topic:
When you create asset master records, the system automatically assigns depreciation information to each asset. You define the default values that the system assigns to new assets when you set up the fixed assets constants, depreciation account and ledger depreciation rules for your system.
4.1 Verifying Depreciation Information
From Fixed Assets (G12), choose Fixed Asset Master Information
From Fixed Asset Master Information (G1211), choose Depreciation Information
Every asset that you set up in the system has one master record. In addition, the asset can have several different ledgers. Each ledger is represented by a separate balance record in the Item Balances table (F1202). You can assign a different depreciation method to each ledger.
If needed, you can also set up different subledger information within each ledger. This may include different life months or salvage value for a particular subledger. For example, this may include additions to an asset, or even a completely different depreciation method. When more than one subledger exists, a message displays and you can review depreciation information one subledger at a time.
After you set up asset master records, you can review both master information and balance information on Depreciation Information. You may want to review Depreciation Information to verify that the depreciation rules that you have set up for the system are correct for individual assets. For example, you can verify the following information:
-
Master record information, such as the business unit, object, and subsidiary accounts that the system uses to create journal entries
-
All the ledgers assigned to the asset, such as budget and depreciation ledgers
-
Depreciation methods for the asset
-
Subledger details, which may include life months, depreciation method, salvage value, and so forth
As you enter master records for individual assets or from the Fixed Assets menu, you can review the default depreciation information based on the depreciation rules. Access depreciation information to:
-
View depreciation information for an asset for any fiscal year.
-
Override an asset's default depreciation information for current or future fiscal years.
-
Add new ledger types and depreciation methods to individual assets if you use the defaults setting in Fixed Assets Constants.
To verify depreciation information
Figure 4-2 Depreciation Information screen
Description of "Figure 4-2 Depreciation Information screen"
-
To locate an asset, complete the following field:
-
Item Number
-
-
To indicate the year to verify depreciation information, complete the following field:
-
Fiscal Year
-
-
To view depreciation information for a specific subledger, complete the following fields:
-
Subledger/Type
-
-
Verify the following account information fields:
-
Accounting Cat Cd
-
Depreciation Cat Cd
-
Asset Cost Account
-
Accum Depreciation
-
Depr Expense
-
Revenue Credit
-
-
Verify the following depreciation information fields:
-
Book Description
-
De Me (Depreciation Method)
-
Life Mths (Months)
-
Dep Inf (Depreciation Information - Initial Term Apportionment)
-
MC (Method of Computation - Compute Direction)
-
Meth %
-
Date Dep Started
-
-
Choose Full Detail.
Figure 4-3 Depreciation Information (Full Detail) screen
Description of "Figure 4-3 Depreciation Information (Full Detail) screen"
-
Verify the following fields:
-
Salvage Value
-
Method 9 Sch No
-
-
For assets that display the message "Multiple Subledgers Exist," choose Previous Subledger and Next Subledger to see the additional subledger information.
| Field | Explanation |
|---|---|
| Subledger | A code that identifies a detailed auxiliary account within a general ledger account. A subledger can be an equipment item number, an address book number, and so forth. If you enter a subledger, you must also specify the subledger type. |
| Subledger Type | A user defined code (00/ST) that is used with the Subledger field to identify the subledger type and subledger editing. On the User Defined Codes screen, the second line of the description controls how the system performs editing. This is either hard-coded or user defined. For example:
A – Alphanumeric field, do not edit N – Numeric field, right justify and zero fill C – Alphanumeric field, right justify and blank fill |
| Accounting Cat Cd | 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: To use the major accounting class code, you must set up a value for blank in the user defined code table. |
| Depreciation Cat Cd | Use this Fixed Asset category code to group assets into "depreciation" categories. Inquiries, reports, journals, and other processes that depend on the depreciation category will make reference to the value in this category code.
Note: You must set up a default value for this category code. |
| Asset Cost Account Bus. Unit | The business unit to which the system charges original acquisition cost and any supplemental capital additions. The system uses a default value for this field based on the value you specify on the Master Information screen when you create a new asset master record. You can change this default value on Depreciation Information only if you have not entered any transactions for the account. |
| Accum Depreciation Bus. Unit | The business unit to which the system charges accumulated depreciation amounts.
Form-specific information The system uses a default value for this field from the responsible business unit you enter on the asset master record or the default value you set up in Depreciation Account Rules. You determine which value the system uses when you set up Fixed Asset Constants. You can change this default value on Depreciation Information only if you have not entered any transactions for the account. |
| Depre Expense Bus. Unit | The business unit to which the system charges depreciation expense.
Form-specific information The system uses a default value for this field from the responsible business unit you enter on the asset master record or the default value you set up in Depreciation Account Rules. You determine which value the system uses when you set up Fixed Asset Constants. You can change this default value on Depreciation Information only if you have not entered any transactions for the account. |
| Revenue Credit Bus. Unit | The business unit that the system credits for revenue amounts that originate in Equipment/Plant Management billing programs.
Form-specific information The system uses a default value for this field from the responsible business unit you enter on the asset master record or the default value you set up in Depreciation Account Rules. You determine which value the system uses when you set up Fixed Asset Constants. You can change this default value on Depreciation Information only if you have not entered any transactions for the account. |
| Bk | The user defined ledger type code (list 09, type LT) that identifies the account ledger, or book, for the asset. You can maintain as many sets of depreciation books (ledger types) for an asset as you need so you can depreciate an asset in different ways for different purposes. For example, an asset might have a three-year life for tax purposes, but a five-year life for financial statement purposes. Each set of books can have different depreciation methods and depreciation values.
Form-specific information If you leave this field blank, the system uses the default value you set up on the Item Setup Default Coding screen. |
| Depreciation Method | The user defined code (system 12, type DM) that indicates the method of depreciation for the specified book. In addition to any user defined depreciation methods you set up for your company, the following standard depreciation methods are available in the Fixed Assets system:
00 – No depreciation method used 01 – Straight Line Depreciation 02 – Sum of the Year's Digits 03 – 125% Declining Balance to Cross-Over 04 – 150% Declining Balance to Cross-Over 05 – Double Declining Balance to Cross-Over 06 – Fixed % on Declining Balance 07 – ACRS Standard Depreciation 08 – ACRS Optional Depreciation 09 – Units of Production Depreciation 10 – MACRS Luxury Cars - Domestic 11 – Fixed % Luxury Cars - Foreign 12 – MACRS Standard Depreciation 13 – ACRS Alternative Depreciation 14 – ACRS Alternate Real Property 15 – Fixed % of Cost 16 – Fixed % on Declining Balance to Cross-Over 17 – AMT Luxury Auto 18 – ACE Luxury Auto Note: Any additional depreciation methods you create for your organization must have an alpha code. |
| Life Mths | The life of an asset in months or periods. The system uses months or periods only to express the life of an asset. For example, if your company uses a 12-month calendar, then a five-year ACRS asset has a 60-month life. If your company uses a 13-month calendar, then a five-year ACRS asset has a 65-month life, and so on. You must specify a life month value for all user defined depreciation methods, and for all standard depreciation methods, except the standard methods 00, 06, 09, 11, and 15. |
| Dep Inf | A code for additional depreciation information. This code is used for Investment Tax Credit (ITC) and averaging conventions. The system validates the code you enter in this field against user defined code table 12/AC. Valid codes are:
0 – No ITC Taken 1 – Three Year Method (3 1/3%) 2 – Five Year Method (6 2/3%) 3 – Seven Year Method (10%) 4 – ACRS Method with Basis Reduction (10% ITC) 5 – ACRS Method without Basis Reduction (2% ITC or No ITC) A – Actual Date of Depreciation Start Period M – Mid-Month Convention Q – Mid-Quarter Convention Y – Mid-Year Convention P – Middle of Period F – First-half/Second-half W – Whole Year N – First Day of Next Period R – First Day of Next Year S – Actual Start Date for Primary Rule/First Day of Period for Secondary Rule Note: Numeric codes apply to standard depreciation methods only. To determine the date for F (First-half/Second-half), use the following guidelines:
|
| Meth Comp | A code that indicates the method of computation that the system uses to calculate depreciation based on the depreciation method you specify.
Valid codes are: C – Current year to date. Calculates only the current year's depreciation. I – Inception to date. Recalculates the entire depreciation amount from the start date through the current year. Prior-year depreciation is then subtracted to determine current year depreciation. This method results in a one-time current period correction for any errors in prior period depreciation. F – Inception to date. Calculates inception to date for the first rule (if there are two rules) and uses a C for the second rule. P – Current period. Calculates depreciation for the current period and then extrapolates the annual amount based on the cumulative percent from the period pattern and year-to-date posting. Any depreciation calculated for the current period is subtracted. R – Remaining months. Depreciates the net book value as of the beginning of the current tax year over the remaining life of the asset. This results in the amortization of prior period calculation errors over the remaining life of the asset. Form-specific information Some depreciation methods require specific methods of computation. If you enter methods that are not compatible, the system displays an error message. You must specify either computation method C or a choice between methods I and R for all depreciation methods. You can use method P instead of I or R for methods 01, 06, 13, and 15. |
| Method % | Enter the percentage you want the system to use when calculating depreciation. Use whole numbers. For example, enter 10 for 10%. The system uses a percentage when computing the following methods of depreciation:
06 – Fixed % on Declining Balance. (This method of depreciation is commonly used by Canadian and utility companies.) 11 – Fixed % Luxury Car - Foreign. 15 – Fixed % of Cost. 16 – Fixed % on Declining Balance to Cross-Over. The system also uses this field to compute any user defined depreciation method in which you specify a percentage. |
| Date Dep Started | The date when the depreciation computations start for an asset. This date can be different from the date the asset was acquired. |
| Salvage Value | The amount you expect to receive in cash or trade-in allowance when you dispose of an asset at the end of its useful life. |
| Schedule No/Method 9 | The alphanumeric code you assign to a units of production schedule. You must set up the schedules you want to use for method 09 (Units of Production Depreciation) in advance on the Units of Production Schedule screen. |
4.1.1 What You Should Know About
| Topic | Description |
|---|---|
| Revising general ledger information | You can revise general ledger information only if you have not posted transactions to the accounts.
If you want to revise cost account or accumulated depreciation account information after posting to the accounts, you can use the asset transfer programs. See Section 27.1, "Transferring Fixed Assets" for more information. |
| Revising account information | If you choose to lock either the accumulated depreciation account or the depreciation expense account to the cost account, you can change only the business unit for either of these accounts and then only prior to the initial posting. Subsequent changes to these accounts can be made only through the asset transfer program.
See Section 48.1, "Setting Up Fixed Asset Constants" for more information. |
| Revising depreciation information | If you choose on Fixed Assets Constants to compute depreciation by using the depreciation rules, you can revise only the Depreciation Start Date, and Salvage Value fields. All other depreciation information must be changed through the ledger depreciation rules.
See Section 54.1, "Setting Up Ledger Depreciation Rules" for more information. |
| Subsidiaries and subledgers | The main difference between a subsidiary and a subledger is that a subsidiary is a portion of an actual account number. A different subsidiary number means a different account number in the Account Master File (F0901). The purpose of a subledger is to allow for greater detail within a single account number. |
| Subledgers | Typically, subledgers are attached to assets at the time cost is assigned to an asset. When a journal entry or Accounts Payable voucher is created, an Account Ledger (F0911) record is created. A subledger and subledger type may be associated with the transaction at that time. When the F0911 record is posted, a separate Account Balances (F0902) record is created for each subledger and subledger type. Similarly, when an F0911 record is posted to Fixed Assets, a separate Asset Account Balances File (F1202) record is created for each subledger and subledger type. When the Compute Depreciation program is run, the subledger and subledger type are copied from the cost account record and utilized for the accumulated depreciation and depreciation expense F1202 records. To track expenses other than depreciation expense, such as maintenance, attach different subledgers and subledger types to the journal entry or voucher. Only the accumulated depreciation and depreciation expense accounts copy the subledger and subledger type from the cost account. |
| Cost records and subledgers | When an Asset Master File (F1201) record is created, a cost account record is created in the F1202 file with a blank subledger. When cost is added with a subledger, a second F1202 record is created. The dual cost records only occur in the first year of an asset's life. When the Asset Account Balance Close program is run at the end of the year, no F1202 record is created in the new year for the F1202 without a subledger attached because it has no amount. |
| Depreciation start date | There is a processing option behind the P1202 to prevent changing the depreciation start date. |
| Depreciation and account values | The P1202 allows three additional selection criteria:
|