Understanding Depreciation Rules

Depreciation rules control how the system calculates depreciation for an asset. You must specify the rules that you want the system to follow when making calculations for user-defined depreciation methods. When you set up rules for a depreciation method, you define a hierarchy of conventions that you want the system to apply to the cost of an asset.

The JD Edwards EnterpriseOne Fixed Assets system includes the base rules for computing standard depreciation methods. You cannot change the standard rules that are included in the JD Edwards EnterpriseOne Fixed Assets system, but you can copy and modify these rules to define depreciation methods that are specific to the company. For example, if you want to set up a depreciation rule for straight-line depreciation with a life period combination that is not included in the JD Edwards EnterpriseOne Fixed Assets system, you can use Depreciation Rule Revisions to copy an existing straight-line rule and change the life periods.

User-defined depreciation rules must have alpha identifiers to distinguish them from JD Edwards EnterpriseOne base depreciation rules. When you set up depreciation rules, the system stores the information in the Depreciation Rules (F12851), Annual Depreciation Rules (F12852), and Depreciation Formulas (F12853) tables.

Note: Numeric methods 00-18 are provided in the system. Additional numeric methods beyond method 18 exist for country-specific reporting needs. Do not create additional numeric methods for 19 and above, or you risk the system overlaying its method 19 with the newly created method 19. You can add as many combinations to 00-18 as you need, and those will not be overlaid. No edit option exists to prohibit overlaying in the event you do not want a demonstration data refresh.

At the highest level, you can set up depreciation rules to apply to the entire period of time over which you want the cost of an asset to be apportioned. Or you can define rules for the period in which the asset in service. You can generate a report to review the depreciation rules.

When you set up user-defined depreciation rules, you must address each part of the rule. A depreciation rule consists of the rule header information, rule conventions, and life year rules.