Creating Alternate Methods (Tax Depreciation Methods)

In the Fixed Assets Management SuiteApp, you can create multiple alternate methods of asset depreciation for tax reporting purposes. You can also create a group tax depreciation method that you can use for a pool of assets.

To create a tax depreciation method:

1. Go to Fixed Assets > Setup > Alternate Methods > New.

2. On the New FAM Alternate Methods record, provide values for the following fields:

   • Name – Type a name for this alternate method.

   • Description – Type a description for this alternate method.

   • Depreciation Method – Select a depreciation method. You can create a new depreciation method if it is not available in the dropdown list. For more information, see Depreciation Methods.

   • Convention – Select the averaging convention that will be used to determine the treatment of depreciation during the first year of an asset's depreciation. Conventions are supported for alternate methods only, and the default value is None. For monthly depreciation periods, the supported convention is Mid-Month. For annual depreciation periods, the supported conventions are Half Year and Mid-Quarter. If the convention is set to Mid-Quarter, the asset will start depreciating for half of the first quarter, regardless of when in that period the asset came into service.

     Note:

     If the Convention value is set to None, depreciation processing will follow the depreciation rule selected in the parent asset record. For details on the depreciation rules, see General Subtab.

   • Asset Life – Enter a value for the asset's lifetime. Units are determined by the value of the Depreciation Period (monthly or annual) on the referenced Depreciation Method.

   • Financial Year Start – Select the first month of the financial year.

   • Subsidiary – Select the subsidiaries that this alternate method will be applied to. To select multiple subsidiaries, press and hold the Ctrl key while selecting each subsidiary.

     Important:

     To avoid potential issues with the depreciation schedules, make sure to set a value for the subsidiary. Add any new subsidiary to applicable Alternate Depreciation Method and to the asset type's Other Method records.

   • Pool Flag – Check this box if this method is used to depreciate a group of assets. For more information, see Group Tax Depreciation.

   • Override Flag – Check this box to make the Depreciation Method, Convention, Asset Life, Financial Year Start, and Period Convention fields editable when this tax method is added to an asset record.

   • Derogatory Depreciation — Check this box if this method is used to recognize the French Derogatory Depreciation method.

     Note:

     This option is available if the Enable Derogatory Depreciation preference is checked in the FAM System Setup page, and if the country or subsidiary of the tax method is set to France.

   • Period Convention – Select the convention that will be used to define a year:

     • 12 months of 30 days each – This convention is generally used in North America and Europe, and produces a more uniform monthly depreciation.

     • Exact number of days in a month, year has 365 days – This convention is generally used in Australia and New Zealand and produces uneven depreciations within the year.

3. Click Save.

The tax method that you created becomes available for selection in the Alternate Method field on the Depreciation History subtab of an asset record.

For information about using group tax depreciation methods, see Using Tax Depreciation Methods.

Related Topics

Fixed Assets Management Overview

Alternate Methods (Tax Depreciation Methods)

Viewing or Editing Alternate Methods (Tax Depreciation Methods)

Adding Tax Depreciation Methods to an Asset

Using Tax Depreciation Methods

Depreciation Methods

Creating Asset Records Manually

Asset Reports

General Notices