Enhanced Depreciation - Full Year Depreciation in First Year

In Italy, depreciation is normally applied in complete years, even if it is posted periodically (for example, monthly) for reporting purposes. This means that when an asset is purchased or capitalised part way through a year, a whole accounting year's worth of depreciation is calculated, and posted in the remaining periods, starting from the Start Period of depreciation defined on each asset in Asset Records (FAS).

For example, an asset is purchased in period 03/2006, with four years' depreciation of 120 euros per year. The periodical depreciation postings start in 03/2006 for a whole year's amount, so it is divided by 10 periods (up to and including 12/2006) giving 12 Euros per month.

To enable you to apply depreciation in complete years in SunSystems, an option is available to calculate the full year's depreciation value during the first year and distribute it across the remaining 'eligible' periods that year. The Full Year Depreciation in the First Year check box in Ledger Setup (LES) applies to all the assets in the business unit.

'Eligible' periods are those specified in Depreciation Timing Rule (FDU) and identified in Ledger Setup (LES), and as per normal SunSystems functionality, the relative distribution within those periods is also specified in the depreciation timing rule. If there is no depreciation timing rule identified in Ledger Setup (LES), then depreciation is distributed equally over the number of periods as identified in Business Unit Setup.