The effect of depreciation locking

You can lock the depreciation accumulated to date.

If you do this, the straight line depreciation calculation for each asset is calculated as the asset's net value divided by the number of depreciation periods remaining for the asset.

Example

In a 12 period accounting year, an asset purchased in 07/2007 with a gross value of 2600 Euros is depreciated until 11/2011 at straight line 20% at 43.34 Euros. Check the check box Lock Calculated Depreciation in Ledger Setup (LES), and change the asset percentage to 12.5%.

Run Depreciation Calculation (FDC) historically for period 06/2012. The calculated depreciate charge is now 7.05 Euros. This new depreciation charge is calculated as follows:

100 / 12.5% x 12 = 96

As 52 of the 96 periods have already been depreciated, the remaining 43 periods are then depreciated at the new percentage.

Example

Asset net value / depreciation periods remaining = new depreciation charge.