Running the Advanced Depreciation Calculation

Advanced depreciation, also sometimes called 'anticipated depreciation', is the multiplication of the ordinary depreciation amount by a factor during the first few years of the asset life. Both the multiplication factor and the term in years for which advanced depreciation applies are defined on each asset record using Asset Records (FAS).

From SunSystems select Asset Advanced Depreciation Calculation (FAA) to calculate advanced depreciation at year-end, after all ordinary depreciation methods have been posted. The advanced depreciation is posted to the same periods as ordinary depreciation, and therefore may be 'back-posted' to periods throughout the year. By setting the Post Transactions option to No on the Advanced Depreciation Calculation form, you can run advanced depreciation calculations without posting to the ledger. You can view the calculation results report, and try different scenarios to help you decide whether to include a group of assets or not for the definitive calculation.

Note: Before calculating the advanced depreciation, you must use Asset Advanced Depreciation Selection (FDA) for all the assets to be included in the calculation, to check or uncheck their Apply Current Year check boxes depending on their Apply From and Term of Years settings in Asset Records (FAS). Advanced depreciation is not calculated in the current year for assets that have been processed with Asset Reduction Depreciation Calculation (FAR), nor for assets that have their Apply Current Year check box unchecked.

For general information on advanced depreciation, see 'What are the Elements of Enhanced Depreciation?' in the Financials Administrator Guide. For the steps required to configure and run advanced depreciation, see 'Setting Up the Elements of Enhanced Depreciation' in the Financials Administrator Guide.

Asset Advanced Depreciation Calculation (FAA)

Asset Class From/To: The asset class, or the range of asset classes, to be processed. Leave this blank either to select all assets, or if you want to select specific asset codes in the field below.

Asset Code From/To: The asset code, or range of asset codes, to be depreciated. Leave these fields blank to select all assets.

Analysis Dimension: The asset analysis dimension to be used to select assets. Leave this blank to select all assets, regardless of the analysis dimensions.

Analysis Code From/To: If an Analysis Dimension has been chosen as the selection criterion above, this analysis code or range of codes is used to select the assets. Only assets that reference one of these codes in the chosen analysis dimension are selected for advanced depreciation.

Depreciation Period: Enter the last period of the current year.

Post Transactions: If you wish to report on the advanced depreciation calculations without posting them, select No. Select Yes to calculate and post the advanced depreciation. If provisional postings are mandatory or optional, you can select Post Provisional to post the transactions as provisional transactions. An advanced depreciation report is always produced.

Posting Period: Select Single to post all of the advanced depreciation calculated to the period specified in the Depreciation Period field. Select Historic to post the advanced depreciation calculated to the period to which it relates.

Suppress Transactions: Select Yes if you only want to print the asset transactions generated during this run. Select No if all of the asset transactions are to be printed, including any previous depreciation, asset and disposal transactions.

Balance Sheet: The balance sheet advanced depreciation account to which the advanced depreciation is posted. Normally, advanced depreciation is posted to the Advanced Deprctn Acnt Bal Sheet identified on the asset record in Asset Records. If this account is blank in Asset Records, then the account entered in this field is used.

Note: SunSystems does not check that the account entered is a Balance Sheet type account.

Profit and Loss: The profit and loss advanced depreciation account to which the advanced depreciation is posted. Normally, advanced depreciation is posted to the Advanced Deprctn Acnt P&L identified on the asset record in Asset Records. If this account is blank in Asset Records, then the account entered in this field is used.

Note: SunSystems does not check that the account entered is a Profit and Loss type account.

Consolidate Profit and Loss: Normally two postings are generated for each asset's advanced depreciation calculation: one to the balance sheet advanced depreciation account and the other to a profit and loss advanced depreciation expense account. If this field is set to Yes, then you can specify how you want to consolidate the profit and loss postings.

Advanced Depreciation Calculation Consolidation

If you select Yes in the Consolidate Profit and Loss field, when you click OK, the Depreciation Consolidation form is displayed. This allows you to define how you wish to consolidate the profit and loss advanced depreciation transactions.

Asset Code From/To: Check the Asset Code check box to consolidate the profit and loss posting by asset code into one transaction line. You can specify the range of asset codes to be consolidated, or alternatively leave the From and To fields blank with the check box checked if you want all asset codes to be consolidated.

Analysis Dimension: For each analysis dimension, check the check box to consolidate the profit and loss posting by that analysis dimension into one transaction line. You can specify the range of analysis codes to be consolidated, or alternatively leave the From and To fields blank with the check box checked if you want all analysis codes for that dimension to be consolidated. Additionally, analysis codes are removed if the analysis is not allowed for the relevant advanced depreciation account.

Note: If you consolidate asset codes and/or analysis codes then those codes are not included on the consolidated transaction line.

In addition to consolidation, you can also use Business Rules to set or validate analysis codes on the generated transactions. To do this, create an Event Profile that checks for a Function Code of Asset Advanced/Reduction Depreciation Calculation, and use a Call Point of either 00015 Populate or 00016 Validate Analysis on System Generated Transactions. See' Analysis Consolidation and Interaction with Business Rules'.

If you use both Consolidation and Business Rules for this function, the analysis codes validated and set by Business Rules are definitive, and if different, override the codes set (or removed) by Consolidation. This is because the Business Rules operate after the Consolidation process finishes setting analysis codes on the generated transactions.

Note: If a transaction fails validation by a Business Rule using call points 0015 or 0016, by default the error message is not shown in the transaction report. This is because it is not included in the SunSystems sample reports; therefore, to show the details of such analysis code validation, you must add an appropriate column for this to the asset depreciation transaction report.