How is the Final Asset Value Treated?

Use Exclude Final Value from Depn in Ledger Setup (LES) to determine how the final asset value that can be maintained for an asset, and how it is treated in the depreciation calculations.

If the Exclude Final Value from Depn option is set in Ledger Setup (LES), by default the final value is used as the base line below which depreciation is not calculated. In other words, the depreciation calculation is based on the full gross value, but stops once the final value is reached. The final depreciation transaction is adjusted to ensure that the net book value is equal to the final value.

If this option is not set, by default the final value is deducted from the gross value before calculating the depreciation. In other words, the depreciation calculation is based on the difference between the gross value and the final value.

This method of treating final values applies to the following depreciation methods:

Straight Line
Sum of Digits
Declining Balance.

To reverse the default, ledger setup selection, for a particular asset, select the Final Value Calculation field in Asset Records (FAS) and Asset Budget Details (FAB).

Note: The override also works in reverse, in that you can leave the Exclude Final Value from Depn field blank, and override this setting for individual assets.

Using the Final Values in Japanese Straight Line Depreciation Calculations

If you are using Japanese Straight Line depreciation, you can enter two final values in Asset Records (FAS). One final value is used to determine the annual depreciation charge. The other is the value to which depreciation will continue to be posted; this must not be greater than the other final value.

Note: The Japanese Straight Line depreciation method ignores the Exclude Final Value from Depn selection in Ledger Setup (LES).