Balance Adjustments

Balance adjustments can be daily, monthly, or annual. These values for the Compute Direction field (DIR1) determine how balance adjustments, or depreciation journal entries are made:

Value	Description
Calculate by Period Adjustments (DIR1 = P)	Depreciation is calculated by period with no catch up. The depreciation amount is apportioned each period (100 percent).
Calculate Annual Amount and Apportion by Period (DIR1 = C, R)	Depreciation is calculated by the annual amount. Depreciation is apportioned by period. For example, 12 periods = 8.3333 percent.
Calculate Amount from the start of an assets life (DIR1 = I)	Use inception-to-date for the first time to catch up, and then change the compute direction. If Compute Direction = I, then depreciation: Starts at the modified start date. Is calculated by the annual amount. Is adjusted for inception-to-date through the current year. Is apportioned by period. For example, 12 Periods = 8.3333 percent.

Value

Description

Calculate by Period Adjustments (DIR1 = P)

Depreciation is calculated by period with no catch up.

The depreciation amount is apportioned each period (100 percent).

Calculate Annual Amount and Apportion by Period (DIR1 = C, R)

Depreciation is calculated by the annual amount.

Depreciation is apportioned by period. For example, 12 periods = 8.3333 percent.

Calculate Amount from the start of an assets life (DIR1 = I)

Use inception-to-date for the first time to catch up, and then change the compute direction.

If Compute Direction = I, then depreciation:

Starts at the modified start date.
Is calculated by the annual amount.
Is adjusted for inception-to-date through the current year.
Is apportioned by period. For example, 12 Periods = 8.3333 percent.