Understanding Depreciation Processing
PeopleSoft Asset Management supports all common methods for depreciation processing and corresponds to Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IAS). Commonly-used depreciation functionality is delivered and ready to be personalized for your enterprise needs. How you define your depreciation processing here determines the depreciation calculation conventions, schedules, terms, and limits for your assets, as well as setup for compliance with periodic asset depreciation legislative and reporting requirements.
Some assets may be depreciated on an annul basis, while others accumulate depreciation monthly or quarterly. Defining depreciation calendars enables you to apply periodic depreciation allocations to assets.
Defining depreciation conventions enables you to establish the start date for asset depreciation. This is used in conjunction with an asset's placed-in-service date to calculate the correct depreciation amount for an asset.
A depreciation schedule is a special type of depreciation method. Depreciation schedules are tables specifying the percentage of depreciation expensed for each period and must be defined for assets using this treatment.
Depreciation terms are typically used in global environments where it is necessary to adjust depreciation calculations to meet local requirements.
Depreciation bonus definitions allow setup of federal or local legislation parameters. These definitions are assigned to assets or asset profiles for automated application of depreciation bonuses for qualifying assets. PeopleSoft delivers depreciation bonus definitions for prior legislation but also enables you to add and configure your own bonus definitions to meet new legislation or other needs that are specific to your organization.
Usually, depreciation limits are imposed by local taxing authorities. Defining depreciation limits enables you to apply the limits to assets accordingly.
Multi-shift codes are used in Germany to accelerate asset depreciation by specifying usage across multiple production shifts. Depreciation is increased as useful life is decreased. Enabling multi-shift codes applies this treatment to depreciation calculations.
In compliance with IAS and GAAP, PeopleSoft provides the option to stop the depreciation calculation in the event the salvage value of an asset exceeds that of its Net Book Value.