Calculating depreciation when an asset is added

When you choose to have prior depreciation calculated at the time an asset is added, the entire catch-up depreciation for the prior depreciation period or periods is recovered at the end of the current period. The remaining periods in the year receive the regular depreciation.

Set compute option to	Y (Yes)
Journal entries generated	Asset (debit) and Asset Clearing (credit) Depreciation Expense (debit) and Accumulated Depreciation (credit)
Result	The asset book year-to-date amount for the current period is the same as if the asset had been depreciating routinely since its in-service date.
Additional steps required	If the in-service date for the asset is from a prior, closed year, you must manually post General Ledger journal entries for the accumulated depreciation of the prior year's depreciation expense.