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Asset Retirement/Scrapping and still is depreciating towards year's end

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Hi all,

Just joined a new company which has some asset management opportunities.  Currently, wwhen the business does an asset retirement or scrapping it encounters the following (let's say mid-year July retirement/scrapping with year and a half depreciation left).

What is taking place with system today is that it generates a "loss and/gain" on asset for the depreciation remaining in 2016.  However, it still shows asset value and a depreciation run rate through rest of 2015.  Ideally, the company wants to write off all of the asset as of July 2015 (in this example).

Any thoughts?

Thanks,

Dave

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Answers (1)

Answers (1)

former_member198650
Active Contributor
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Hi David,

First of all when you do asset scrapping by ABAVN/ABAV, system wont generate any gain/loss entry. However, if you scrap the assets in mid year i.e.July month and you have not run any depreciation till that period. Then system will calculate the depreciation up to the period and remaining value posts to scrap a/c. But this depreciation posting will be happened based on the period control method of the depreciation key. If the period control method as 01 for retirement, it will calculate the deprecaition up to the period. However, until you run the depreciation for the period, the assets will show a balance. But if you check the NBV of the assets, there will be 0.

Regards,

Mukthar

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Hi Mukthar,

Thanks for the reply.  I believe I am comfortable with the period control method and the calculation thereof in July as you explained...actually that is what I was expecting to happen.  The issue  is that there is still depreciation plan posting that take place for the rest of the fiscal year 2015 (see 1st screenshot).  Expectation is period 8 and beyond would be zero depreciation...but it looks like it split July depreciation and smoothed it out for the rest of the year.

Thanks,

Dave

Note: Asset Value date of 7/31/15 used for retirement.

former_member198650
Active Contributor
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Hi David,

Are you sure have you done asset scrapping by ABAVN? I think you have done ABAON. Due to this net book value has posted with 820.66 instead of 830. If you have done ABAVN, system will post remaining NBV as scrapping. Can you please share screen shot of accounting document of the retirement.

Regards,

Mukthar

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Hi Mukthar,

Thanks.  I actually played a little bit with this the other day.  I found that using ABAVN and using the asset date to previous month that got full gain or loss on asset posting with no planned depreciation in following months....although I need to test this on some other assets since it does not seem totally consistent.

As requested, here is the financial entry for 10224 asset above.  Retirement took place in July with Asset date of 7/31/15 used.  I believe if Asset of 6/30/15 was used would have eliminated the planned depreciation of $2.33/4 from August through December.   Not sure I am totally satisfied with that at moment since I don't recall previous companies acting in same fashion.

I am sure there is a trigger in IMG that is not set properly....although using the standard LINA depreciation key.

Thanks for your help.

Dave

Former Member
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Dear David,

Could you please share how your problem was resolved?

I am now facing the same issue.

Thank you so much in advance.

Wish you a good day~

Ida