Fixed asset useful life change process

[rmpal]

Dear Experts,

Here I enclosed the fixed asset useful life change process scenarios. We get wrong depreciation calculations.

Kindly go throw it and give a correct solution for it. We need to answer our client.

Expected valuable replies ASAP.

Thanks in advance.

Scenario 1
Asset Code: TESTASSET9-000001
Asset Name: TESTASSET9-01/120m
Useful life: 120 months
Depreciation Type: STRAIGHT LINE (Acquisition value/Total Useful life) and enabled Round Off.
Capitalization Date: 01.04.23
Depreciation Start Date: 01.04.23
Capitalization value: 1000
First depreciation run on 31.03.24
As per now we have the NBV is:
(1000/120) = 8.33 => 8 (Round off)(Depreciation/month)
8*12 = 96 (Depreciation per year)
New NBV => 1000-96 = 904
Asset History Sheet report
Balance Sheet Account	Account Name	Asset Class	Asset No.	Asset Description	Historical APC	Capitalization Date	Useful Life	Remaining Life	Depr. Type	APC on Start Date	Accum. Depr. on Start Date	Accum. Write-Up on Start Date	NBV on Start Date	Capitalization	Retired APC	Retired NBV	Transferred APC	Transferred NBV	Write-Up	Depreciation	APC on End Date	NBV on End Date	Depr. on End Date	Accum. Depr. on End Date
1010101002	Asset - Buildings		TESTASSET9-000001	TESTASSET9-01/120m	0	01-04-2023	120	96	STRAIGHTLINE	1,000.00	96	0	904	0	0	0	0	0	0	0	1,000.00	904	96	96
Now we are changing useful life from 120months to 732months on FY2023
As per our calculation the NBV is:
(1000/732) = 1.36 => 1 (Round off)(Depreciation/month)
1*12 = 12 (Depreciation per year)
New NBV => 1000-12 = 988
Asset History Sheet report
Balance Sheet Account	Account Name	Asset Class	Asset No.	Asset Description	Historical APC	Capitalization Date	Useful Life	Remaining Life	Depr. Type	APC on Start Date	Accum. Depr. on Start Date	Accum. Write-Up on Start Date	NBV on Start Date	Capitalization	Retired APC	Retired NBV	Transferred APC	Transferred NBV	Write-Up	Depreciation	APC on End Date	NBV on End Date	Depr. on End Date	Accum. Depr. on End Date
Wrong Depreciation (actually we got)			TESTASSET9-000001	TESTASSET9-01/120m	0	01-04-2023	732	708	STRAIGHTLINE	1,000.00	-24	0	1,024.00	0	0	0	0	0	0	0	1,000.00	1,024.00	-24	-24
Actual Depreciation (Expected)			TESTASSET9-000002	TESTASSET9-02/732m	0	01-04-2023	732	708	STRAIGHTLINE	1,000.00	12	0	988	0	0	0	0	0	0	0	1,000.00	988	12	12

[gvijayfico]

Hi Experts,

[jitin_chawla]

Hi,

Have you checked the similar scenario on the DEMO database.

When the useful life is changes, the planned depreciation is recalculated. Hence, whatever the depreciation was posted in previous year with 120 useful life is adjusted based on the calculation which is now based on the new useful life of 732 months. 

If you run the Depreciation Run again for the previous year(last period), you will find that the system now tries to be post a negative depreciation for that year to adjust the extra depreciation posted.

Check in DEMO.

Also, you can check the following if it helps in some way to clarify things:

https://community.sap.com/t5/enterprise-resource-planning-blogs-by-sap/how-useful-life-is-handled-in...

Kr,

Jitin

[rmpal]

Dear Jitin,

Provided link has explained about the depreciation based on Straight line calculation = (NBV/Remaining Life),

But we need the demo for Straight line calculation = (Acquisition value/Total Useful life),