Running the Depreciation Calculation

Depreciation Calculation (FDC) calculates and posts depreciation for a range of asset codes. It does so for all of the periods between the last time depreciation was calculated and the selected period.

Each asset record contains the following details which are used by the Depreciation Calculation as the basis for the calculations:

The depreciation method
The gross value of the asset, calculated from transactions
The accumulated depreciation, calculated from transactions
The net value of the asset, the difference between the gross value and accumulated depreciation
The final value of the asset, which can either be deducted before depreciation is calculated, or can be a value below which depreciation is not calculated. See 'How is the Final Value Treated?'

Additionally, the depreciation cost can be spread according to the timing rules code defined in Depreciation Timing Rules (FDU), or apportioned across different analysis codes according to the preset posting analysis details, or both.

Sequencing can also be applied to system generated depreciation transactions. See 'Introducing Ledger Sequence Numbering'.

Note: The Depreciation Calculation (FDC) calculates and posts standard depreciation, and does not calculate advanced depreciation or reduction depreciation. Those calculations are performed at year end using Calculate Advanced Depreciation (FAA) and Asset Reduction Depreciation Calculation (FAR). For more information see 'What are the Elements of Enhanced Depreciation?'.

Closed or Suspended Accounts

You can specify a suspense account to be used in Depreciation Calculation. If any depreciation is due to be charged to an account with a status of Closed or Suspended in Chart of Accounts (COA), the posting is made to the suspense account and a warning is given on your depreciation calculation report.

Multi-Currency Depreciation

Asset values can be maintained in the base currency, transaction currency, and second base / reporting currency, and different depreciation methods may be used for each. Depreciation Calculation calculates the depreciation required for the base, transaction, and second base / reporting currencies.

Note: If you are using expenditure checking, transactions are posted during Depreciation Calculation even if budgets are exceeded.

Depreciation Exceptions

If an asset already has a depreciation amount posted to it within a period, then it is excluded from the Depreciation Calculation for that period, and a depreciation amount is therefore not posted for that asset.

You cannot post depreciation to an asset that has the status Ready for Disposal or Suspended.

The final value is a value below which depreciation is not calculated. It can either be deducted before depreciation is calculated, so that it is always excluded from depreciation calculations, or depreciation can be calculated on the gross amount, until the net value reaches the final value. In the final depreciation calculation, only the difference between the net value and the final value is generated. See 'How is the Final Asset Value Treated?'

It is important to note that the net value may be less than the final value if depreciation is posted manually or if the gross value is reduced by posting a disposal. Such exception conditions are shown on the Asset Status Listing.

Depreciation Calculation (FDC)

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 depreciation.
Depreciation Period: Depreciation is calculated for periods between the last period for depreciation and the period selected here. The default is for depreciation to be calculated up to the current period. Otherwise, enter the period up to which depreciation is to be calculated.
Post Transactions: If you wish to report on the depreciation calculations without posting them, select No. Select Yes to calculate and post the depreciation. If provisional postings are mandatory or optional, you can select Post Provisional to post the transactions as provisional transactions. A depreciation report is always produced.
Posting Period: Select Single to post all of the calculated depreciation to the period specified in the Depreciation Period field. Select Historic to post the calculated depreciation 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 depreciation account to which the depreciation is posted. Normally, depreciation is posted to the balance sheet account 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 depreciation account to which the depreciation is posted. Normally, depreciation is posted to the profit and loss account 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 depreciation calculation: one to the balance sheet accumulated depreciation account and the other to the profit and loss depreciation expense account. If this field is set to Yes, then you can specify how you want to consolidate the profit and loss postings.

Depreciation Calculation Consolidation

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

Note: 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.