This process can be used to perform global changes to the asset depreciation rate and method for both the company and the tax methods, within a group. It is especially useful for legislation changes.
The change is carried by a nominated asset group and only for those assets with a purchase date greater than the entered date.
- In the menu, expand Other Modules > Fixed Assets > Entry and double-click FA Global Depreciation Change. FA011 Global Depreciation Change panel appears.
- Enter the following information for the required changes.
| Field | Description |
| Asset group | Indicate the particular group to which an asset belongs. Leave the field blank to select all Asset Groups. |
| Effective date | This date on which the change will become effective is mandatory. |
| Company depreciation method |
In Work with Assets this mandatory field contains the Company Depreciation Method. S=Straight Line (prime cost method) D=Diminishing Value Method (or Reducing balance) X=Straight Line ADJ Y=Diminishing Value ADJ X and Y Adjustment depreciation methods are used for incorrect depreciation amounts to recalculate and apply any variances from the purchasing period to the current month. This provides flexibility to adjust any variance automatically removing any manual process involved in calculating differences. The depreciation type and rate are based on the asset group selected when adding the asset. Under the Prime cost method, a deduction equal to a percentage of the original cost of the plant is allowable in each income year over its effective life. This method assumes that plant depreciates uniformly throughout its life. Where plant is used for the purpose of producing assessable income (or is installed ready for use for that purpose) for only part of the year, the deduction for depreciation is calculated on a pro rata basis. Under the Diminishing value method, depreciation is assumed to be greatest in the first year and smaller in each succeeding year. Depreciation is calculated in the first year by applying a percentage to the cost of the plant. In the second and following years, depreciation is calculated on the un deducted cost of the plant at the start of the income year. Other codes can be setup using TMSFA/DEP-TYP which allows calculation of depreciation from inception of the asset .
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| Tax depreciation method | The Tax Depreciation Method is mandatory. Refer to Company Depreciation Methods for further information. |
| Company depreciation rate | The company depreciation rate field is the percentage figure used relevant to the company situation. The depreciation type and rate are based on the asset group selected when adding the asset. |
| Tax depreciation rate | This field is a percentage figure relevant to the taxation situation. For tax purposes, depreciation deductions are allowed only in respect of a more narrow class of property called plant. Rates of depreciation may also differ for tax and account purposes. |
- Click OK to save the changes.
