How to speed up depreciation for an asset's rest life

[Dylan2]

Hi,

I have one question about depreciation. Our company need to move to new Office, I want to speed up an asset depreciation. My question is: I want to keep the depreciation history not change, but for the rest useful life, for instance, It still has 10 months, 1000cny/Month to run depreciation, now I need to let it complete in 5 months, 2000 cny/month to run the net value to zero.

I tried to added an interval date and set the useful life to 5 period, but the weird was, the depreciation be calculated in only 1 month, not 5 months,  the net value became zero directly. what wrong with my set?

[Chris1973]

Hello @Dylan2 

Thank you for your question.

The Depreciation Key & Asset Master Data references will provide details.

However, to summarise, in public cloud your requirement is supported through the intervals in the asset master. The issued about depreciation you described comes from how the interval and the useful life settings are interpreted.

The reason that happens is because when you create a new interval and set the useful life to a range of 5 periods, the system then interprets it as the entire remaining net book value must be depreciated across the new life starting at the new interval start date. So, if the start date of the new interval does not align with the next depreciation period or if the remaining life is misaligned with the Depreciation Key logic e.g., pro rata to zero, the system may try to post everything in the first period instead of spreading it across.

The recommended best practice is to:

• Keep your historical interval and not adjust or overwrite them in this process
• It is best you create a new interval starting from the next posting date
• Adjust useful life correctly by entering the number of remaining periods you want the asset to depreciate over instead of 5 periods.
• Ensure you set your depreciation key correctly to distribute over remaining life by ensuring the useful life is set in a way that interval starts in the right period. This will spread it over 5 months.
• Finally, you can verify your data by using the simulate change function which then displays depreciation calculation. If the system still takes all in one month, check if the remaining useful life is calculated correctly in your new interval. Sometimes you need to leave years blank and only set period 5

I hope this provides the desired insight. Happy to answer any further questions.

Best regards

Chris

[Dylan2]

Hi Chris, you really explain it very nice, thank you so much. I think the reason was my depreciation key, I used LINS to run depreciation, but it seems LINS is by year, not month. Then I found if I want the depreciation goes to next 5 months(across year), I need to set a longer useful life like 1 year and 5 periods， then it will not go to only one month.