Method switching and how it affects depreciation calculation methods

When you define books in the Asset Management application, you can allow or prohibit method switching. If you allow method switching on books that use Lawson predefined depreciation methods, the Asset Management application will automatically switch the depreciation calculation method to Straight Line (SL) when it is advantageous to do so.

In addition, you can customize the method switching process. You can select one of three methods of straight line calculation for optional method switches. The three methods trigger the switch to straight line calculations based on original basis or net book value, and calculate on initial or remaining values. To activate the method switch, set the flag on the book (AM00.1) to Yes.

If the SL Calculation field = "D", the method switch happens when the straight-line depreciation, which is calculated by using the net book value, exceeds the depreciation amount that is calculated by the current method. The actual depreciation amount is then based on the straigh-line calculation using the net book value.

If the SL Calculation field = "O", the method switch happens when the straight-line depreciation, which is calculated by using the original basis, exceeds the depreciation amount that is calculated by the current method. The actual depreciation amount is then based on the straigh-line calculation using the original basis.

If the SL Calculation field = "M", the method switch happens when the straight-line depreciation, which is calculated by using the original basis, exceeds the depreciation amount that is calculated by the current method. The actual depreciation amount is then based on the straigh-line calculation using the net book value.

If the SL Calculation field = "N", the SL calculation field is not applicable to the method switch.

After this method is created and assets have begun depreciation, the method should not be modified (specifically the SL Calculation selection). If the SL Calculation flag is modified while assets are past the optimization switch point, depreciation amounts are affected.

You can define a custom depreciation method to switch to a method other than SL. Defining depreciation calculation methods