Reverse depreciation
LN posts all the journal entries of fixed asset depreciation
transactions to General Ledger module for the posting-book defined in the FAM Parameter (tffam0100s000) session. The book must be a financial book or a
commercial book.
In addition to the posting book, you can also post the
depreciation transactions for additional or non-posting books defined in the FAM Parameter (tffam0100s000) session to General Ledger module.
If you select the Depreciation Postings to General Ledger check box in
the Asset Books (tffam1510m000) session, you can post the depreciation transactions
for additional books to General Ledger module.
If the asset is disposed, the accumulated depreciation postings
to General Ledger module
are reversed for the posting book. In addition, to these reverse entries, LN generates
the journal entry for reversal of accumulated depreciation amount for the additional
posting books.
Example
The value of an asset $12000. Asset's life is 1 year. The
following journal entries are defaulted when you clear the Depreciation Postings to General Ledger check box in
the Asset Books (tffam1510m000) session. LN generates
the following journal entries for the additional posting book.
| Transaction | Type | Ledger Account | Amount |
|---|
| Asset
Capitalization | Debit | Asset account (from
IDT FAM_ASSE) | 12000 |
| Credit | Capital
Accumulation account (from IDT FAM_CAPA) | 12000 |
| Asset Depreciation
for Period 1 | Debit | Depreciation Expense
account (from IDT FAM_DEPR) | 1000 |
| Credit | Accumulated
Depreciation account (from IDT FAM_ACCU) | 1000 |
| Asset Depreciation for
Period 2 | Debit | Depreciation Expense
account (from IDT FAM_DEPR) | 1000 |
| Credit | Accumulated
Depreciation account (from IDT FAM_ACCU) | 1000 |
| Asset Disposal after
period 2 for 9000 | Credit | Asset account
(from IDT FAM_ASSE) | 12000 |
| Debit | Accumulated Depreciation account (from IDT
FAM_ACCU) | 2000 |
| Debit | Asset Sales proceed account (from
FAM_PROC) | 9000 |
| Debit | Loss account (from FAM_LOSS) | 1000 |
The following journal entries are defaulted when you select the Depreciation Postings to General Ledger check box in
the Asset Books (tffam1510m000) session. LN generates
the following journal entries for the additional posting book.
| Transaction | Type | Ledger Account | Amount |
|---|
| Asset
Capitalization | Debit | Asset account (from
IDT FAM_ASSE) | 12000 |
| Credit | Capital
Accumulation account (from IDT FAM_CAPA) | 12000 |
| Asset Depreciation for
Period 1 | Debit | Depreciation Expense
account (from IDT FAM_DEPR) | 1000 |
| Credit | Accumulated Depreciation account (from IDT FAM_ACCU) | 1000 |
| Debit | Debit account for Calculatory Depreciation
account (from IDT FAM_CALC) | 1000 |
| Credit | Credit
account for Calculatory Depreciation account (from IDT FAM_CALC) | 1000 |
| Asset
Depreciation for Period 2 | Debit | Depreciation Expense account (from IDT FAM_DEPR) | 1000 |
| Credit | Accumulated
Depreciation account (from IDT FAM_ACCU) | 1000 |
| Debit | Debit
account for Calculatory Depreciation account (from IDT FAM_CALC) | 1000 |
| Credit | Credit
account for Calculatory Depreciation account(from IDT FAM_CALC) | 1000 |
| Asset
Disposal after period 2 for 9000 | Credit | Asset account (from IDT FAM_ASSE) | 12000 |
| Debit | Accumulated
Depreciation account (from IDT FAM_ACCU) | 2000 |
| Debit | Asset
Sales proceed account(from FAM_PROC) | 9000 |
| Debit | Loss
account (from FAM_LOSS) | 1000 |
| Debit | Debit account (from IDT FAM_ADDL) | 2000 |
| Credit | Credit account from IDT FAM_ADDL | 2000 |