1. Accounting
  2. Fixed Assets Management
  3. Setting Up the Fixed Assets Management System
  4. Depreciation Methods
  5. Japan Depreciation

Japan Depreciation

The Japan Old Straight Line and Japan Old Declining Balance depreciation methods are used for assets purchased before April 1, 2007. When the asset value equals 5% of the original cost, it will be depreciated using the Straight Line method over 5 years (60 months) until the residual value equals 1 JPY.

The Japan Old Straight Line yearly depreciation limit is calculated as 90% of acquisition cost, multiplied by the depreciation rate.

Japan Special Depreciation

Important:

If you are using the Japan Special Depreciation, you must enable Custom Transactions in your account. Go to Setup > Company > Enable Features > SuiteCloud. Under the SuiteGL section, check the Custom Transactions box.

Companies that meet the Japanese tax authority's requirements may apply a special depreciation to their assets. This method is an accelerated depreciation that's applied in addition to the asset's regular depreciation.

The special depreciation lets customers complete the depreciation process early and calculate their taxable income. Customers can apply the special depreciation to an asset within the first 3 years of its life.

Note:

The special depreciation can be applied only to assets that use the Japan Straight Line, Japan 200 Declining Balance, and Japan 250 Declining Balance methods.

Adding Special Depreciation Details

If your asset uses the Japan Straight Line or Japan Declining Balance depreciation methods, you can apply special depreciation. You can enter the special depreciation information from the Asset record page.

Note:

Make sure that the Custom Transactions feature is enabled on your account.

To enter special depreciation details:

  1. Go to Fixed Assets > Lists > Assets.

  2. On the FAM Asset List page, click Edit next to the asset record where you want to add a special depreciation.

    Note:

    Make sure the asset uses the Japan Straight Line, Japan 200 DB, or Japan 250 DB depreciation method.

  3. On the Asset record, click Special Depreciation.

  4. On the Special Depreciation page, enter values for the following fields:

    • Date - Enter the date of the special depreciation.

    • Special Depreciation Rate - Enter the percentage of acquisition cost allowed for the special depreciation limit.

    • Special Depreciation Limit – Enter the maximum special depreciation amount you can apply to the asset.

    • Special Depreciation Amount – Enter the special depreciation amount applied for the year.

    • Applied Term 1 – Enter the article where the special depreciation is documented.

    • Applied Term 2 - Enter the term where the special depreciation is documented.

    • Special Depreciation Shortage - This field shows the Special Depreciation Limit minus the Special Depreciation Amount. This field is available if you're entering special depreciation for the succeeding years.

  5. Click Save.

    The system uses the same account to record the special depreciation and regular depreciation. The special depreciation amount reduces the net book value.

    A new DHR type called Special Depreciation is created, and the FAM Special Depreciation Entry is attached to it.

General Notices