Short Years in Fixed Assets
When changing the fiscal year or setting up a new company within the fiscal year, you need to address setup issues for the short year minus the normal number of operating periods. For example, you must change the fiscal date pattern to reflect the short year and the new fiscal year format for subsequent years. Changing the date pattern might be a result of:
A change in the company's policy to end the fiscal year at a different time.
A company merger or acquisition.
You can also set up a short year for an existing company.
Date patterns are associated with a date pattern code that you set up on the Work with Companies form.
You can set up fiscal date patterns for the current fiscal year, the preceding fiscal year, and the next fiscal year.
Short-year issues create a short-tax-year issue that involves depreciation beginning in the first year under the new date pattern. Based on guidelines established by the tax code, you must change the assets with a remaining net book value (NBV) or the assets that exist in a short or prior year to a method of computation R. This change begins in the first year of the new date pattern following the short year and subsequent years. In addition, you cannot use depreciation methods that are based on the tax tables (for example, ACRS or MACRS depreciation methods 12 and 13) because the date pattern change prevents the system from tracking by using the tax tables. The system cannot align columns and rows for tax table values. Method of computation R cannot be used with all tax table methods. Therefore, you must change to methods 03, 04, or 05 for personal property as appropriate, or 01 for real property.
To change the method of computation, you can change Item Setup Default Coding and then run the Update of Depreciation Values program, which uses the defaults for the first full fiscal year under the new date pattern. After updating the necessary assets, change the default coding back to the desired value for new assets that are being added to the system in the first year of the new date patterns and into future years.
If you repost the general ledger because of the change in fiscal years, you should run the repost in the JD Edwards EnterpriseOne Fixed Assets system to update the Asset Account Balances File table (F1202). A short year will not actually exist because you are updating the system's records to appear as though the system has always been on the new date pattern.
However, the Repost option does not work if depreciation entries have been summarized because the Account Ledger table (F0911) detail does not exist. To post back to Fixed Assets, the detail in the Account Ledger must exist.
If you cannot use the Repost option because of summarized depreciation, you can set up a parallel environment to run the JD Edwards EnterpriseOne Fixed Assets system. This action enables you to copy the fixed asset records from the production environment as though you are doing a Fixed Asset conversion. You can also use this method if you have a new date pattern that is in the same fiscal year as the old date pattern. If this scenario exists, you might want a JD Edwards EnterpriseOne consultant to help you with the process.
If you can repost, some depreciation consequences might occur. You might need to adjust the depreciation methods for assets using mid-year, mid-quarter, or mid-month conventions because assets can be misstated as a result of the repost change. In addition, you have to manipulate the depreciation setup to correctly reflect the depreciation balances and to change to a method of computation R.
The short-year process described in this section is merely a guideline to help you achieve the desired results and is not meant to represent U.S. Tax Code Regulations.