Depreciation after change in useful life of fixed asset

[former_member462368]

Hi,

We have an Asset (X) put to use in year 2011 with a life of 10 years ,purchased for Rs.12000/- and straight line method is used for depreciation.

As on date depreciation is calculated for 4 years (@ 1200/year ) i.e Rs.4800/- and the net book value is Rs.7200.

Now we are changing the useful life to 20 years , ordinary depreciation gets calculated at Rs.600/year for 12years and asset becomes zero after completion of 16 years( on 2017 )  but i want the depreciation to be run till 20 years ( i.e 2021 ) .

For achieving the above said scenario I have done write up for Rs.2400/- using ABZU .Now this write up amount is not getting updated in ordinary depreciation and for year 2018,2019,2020,2021 the depreciation amount is zero.

Kindly guide me If I have gone wrong in following the procedure or steps to achieve my desired resiults.

[former_member1049393]

Hi Prashanth,

I hope what you have done is correct.

Just increase the extra posted deprecation through writeup method and change the usefull life to 16 years in the asset master data.

Net book value as on date : 7,200

Add on (Writeup)               :  2,400

Total value is 9,600/-. now change the usefull life in asset to 16 years and system will calculate the depreation 9600/16=600 p.a. as per your requirement.

Note: Pleae check the Asset closed fiscal year before change the useful life because system will calculate the new depreation based on the useful life for the open periods and posts automatically to the current period when you run the depreciation.

Corret me if am wrong.

Thanks & regards,

Gopi.P

[Former Member]

Hi Prashanth,

Please let me know if you want to calculated depreciation on Net book value for remaining years or on original acquisition price.

Regards,

Gaurav

[former_member198650]

Hi Prashanth,

If you are using the depreciation key based on useful life, then select remaining life check box in the multi level method of the depreciation key and recalculate the depreciation in AFAR for the asset.

Regards,

Mukthar

[former_member205041]

Hi Prashanth,

If you change the depr. key or any depr. relevant parameter, the depr. will be recalculated for all open fiscal years, not for closed years.

Because of legal requirements you cannot recalculate the values for closed periods.

But you can make adjustments in the open periods (for the closed periods).

Write-up:

= The reversal of past depreciation.

Write-ups are necessary either when the depreciation posted was too high or
when the reasons for unplanned depreciation no longer apply.

Unplanned depreciation:

=  An unplanned value correction as the result of a reduction in asset value, that

appears to be permanent.

best regards

Bernhard