How to make these changes for an Asset ?

[Former Member]

Hi,

I want to change Useful life and Asset Class for one asset but i don't know the effect of these changes and how to do them ?

i hope your help.

Regards.

[Former Member · Accepted solution]

Hi Jehade

Changes to Useful life - If you increase the useful life, you are prolonging the spread of depreciation over that extended period of time, thus in month depreciation will be reduced and vice versa. You have to be mindful that if the asset has scrap value specified then, the in month depreciation will stop soon as the net book value is equal to scrap value. (two way to maintain scrap value, via cut off key in depreciation key definition or explicitly specify in asset master by double clicking the depreciation key itself)

Change of asset class - You cannot change asset class of an asset once it has been created for one class, only way forward would be to transfer the asset via transaction ABUMN. You have to be mindful of all the aspects of the new asset class e.g. depreciation key, default useful life etc. Other thing to keep in mind the valuation date and depreciation start date, this are very important as any overlap to already posted depreciation or depreciation key which post full year depreciation when acquired in first half of the year and half year depreciation when acquired in second half of the year. There are chances that you will end up with too much deprecation if not careful about depreciation start date.

Hope this helps.

SA

[Former Member · Accepted solution]

About depreciation start date : Must i maintain the same date of the old Asset or enter a day of transfer as a depreciation start date for the new Asset ?

please how to avoid overlap of depreciation ?

Regards.

[Former Member · Accepted solution]

Hi

Depending the way your depreciation key calculates the deprecation, if it is just normal way, like straightline or reducing balance then, say for instance, you are about to transfer Asset A in June then, you must have had run the depreciation for May month end, thus when you transfer asset to new class ordinary depreciation start date will be 01.06.2008 i.e. although you may have done the actual transfer during June. This will insure the correct depreciation continuity.

Now in case your dep key has got some complex condition which triggers additional depreciation which renders depreciation overlap, then choosing the correct deprecation start date will help you avoid additional depreciation. In some cases its very virtually impossible to avoid this and rather than creating new depreciation key to accommodate this transfer, best way forward would be to do negative unplanned / manual deprecation, through ABAA. For this you have to make sure the negative postings are allowed under config.

Hope this helps !

SA

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