Depreciation calculation for added assets

After selecting a previous depreciation that is calculated at the time an asset is added, the entire catch-up depreciation for the previous depreciation periods is recovered at the end of the current period. The remaining periods in the year receive the regular depreciation.

Calculation Description
Compute Option Set to Y
Journal entries that are generated at addition time

  • Asset (debit) and Asset Clearing (credit)

  • Depreciation Expense (debit) and Accumulated Depreciation (credit)

    Note:  Journal entries are generated only if you have assigned a posting book to the asset.
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, then you must manually post General Ledger journal entries for the accumulated depreciation of the prior year's depreciation expense.