Depreciation allocation

A depreciation allocation is associated with an asset type. Both the company's system options and type are flagged to use allocations.

After associating a new asset with a type that is defined to use depreciation allocation, the depreciation expense for that asset is distributed among the various class dimension codes that include the allocation. The distribution is based on the percentage that is allocated to each class dimension code. The distribution occurs when you run Asset Depreciation Calculation And List and Asset Period Close. The depreciation is posted to the depreciation expense account that is defined for the asset type.

• If you define an asset to use depreciation allocation, then you must assign an expense class dimension code that is included in the depreciation allocation.
• If the depreciation expense class dimension code is defined in the class dimension code group that is used by the asset, then the depreciation allocation must include that class dimension code.
• If no depreciation expense for the class dimension code is identified on the class dimension code group or if the asset does not use a class dimension code group, then the default class dimension code that is used for the asset must be included in the depreciation allocation.

See the Financials Setup and Administration Guide.