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, the asset 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 requirements specified by the Japanese tax authority may apply a special depreciation to their assets. This method is an accelerated depreciation and is applied in addition to the regular depreciation of an asset.

The special depreciation will enable customers to complete the depreciation process early and calculate their taxable income. The special depreciation may be applied 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 is using the Japan Straight Line or Japan Declining Balance depreciation methods, you can apply special depreciation to your assets. 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 for which you want to add a special depreciation.Note: Make sure the asset is using 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, provide values for the following fields:

    • Date - Enter the date of the special depreciation.

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

    • Special Depreciation Limit – Enter the maximum amount of special depreciation that can be applied to the asset.

    • Special Depreciation Amount – Enter the actual special depreciation 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 - The value in this field is computed as Special Depreciation Limit, less the Special Depreciation Amount. This field is available if you are entering special depreciation for the succeeding years.

  5. Click Save.

    The account used to record the special depreciation amount is the same account used for regular depreciation. The special depreciation amount reduces the net book value.

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

General Notices