Example: Calculate depreciation for prior period, current year
Imagine that an invoice was received for a computer placed in service in the prior month. Use the compute option to have the Asset Management application calculate depreciation expense for the prior month when the asset is added.
| Debit | Credit | |
|---|---|---|
| Asset | X | |
| Asset clearing | X | |
| Depreciation expense (prior period) | X | |
| Accumulated depreciation (prior period) | X |
Effect on General Ledger account balances
The prior month depreciation amount is transferred to the General Ledger application in the current month.
The current month depreciation expense is calculated during fiscal period close.