Understanding Depreciation for Assets Acquired on or After April 1, 2007

Assets that you acquired on or after April 1, 2007 that depreciate using a declining-balance depreciation method must change to a straight-line depreciation method. The period in which you make the change to the straight-line depreciation method depends on the useful life of the asset.

Important: You run the Assets acquired on or after April 1 - 2007 program to change the depreciation schedule. The Assets acquired on or after April 1 - 2007 program uses and updates values in the Asset Master File table (F1201) and Asset Balance table (F1202). Before the first depreciation cycle of the year, you must run the Compute Depreciation program (R12855) to update the F1201 and F1202 tables for the ledgers that you use for the guaranteed amount and annual depreciation amount. You then run the Assets acquired on or after April 1 - 2007 program to update fields in the tables, and then run the Compute Depreciation program again to use the updated values that were generated by the Assets acquired on or after April 1 - 2007 program. The system will select an asset to process only once, so you do not need to run the Assets acquired on or after April 1 - 2007 program after you have processed all of the assets that need to be converted to a new depreciation method.

When you run the Assets acquired on or after April 1 - 2007 program, the system selects the records in the F1201 table to process using this selection criteria:

• Date of asset acquisition.

  The asset must have been acquired on or after April 1, 2007. Data selection in the ZJDE0001 version of the Assets acquired on or after April 1 - 2007 program is set to select assets that were acquired on or after April 1, 2007.

• Disposal date.

  The asset is not selected for processing if a disposal date exists for the asset.

• Asset not previously processed.

  The asset must not be marked as previously processed as the system processes a record only once. The information about the processed status is stored in an asset master category code that you specify in the processing options.

When you run the Assets Acquired On or After April 1 - 2007 program to change the depreciation schedule, you set processing options to specify the values to which the system updates these characteristics:

• Depreciation method in the F1202 table.

• Depreciation life month in the F1202 table.

• Computation method in the F1202 table.

• Initial term apportionment code in the F1202 table.

• Asset category code in the F1201 table.

  You specify the category code that the system uses to indicate that an asset record was processed by the Assets Acquired On or After April 1 - 2007 program. The system does not reprocess records that indicate that they have been processed.

• Book value in the F1201 or F1202 table.