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 Parameters (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 Parameters (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 |