About depreciation [AX 2012]

Updated: July 21, 2011

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

Depreciation is a periodic transaction that typically reduces the value of the fixed asset on the balance sheet, and is charged as an expenditure to a profit and loss account.

Therefore, a main account is usually used for crediting the periodic depreciation on the balance sheet. An offset account is an account in the profit and loss part of the chart of accounts.

Usually, only a correction to a posted depreciation transaction is posted as a depreciation adjustment. Therefore, both the main account and offset account are set up just like the accounts for depreciation. A depreciation adjustment can be a positive or a negative amount, but the functionality of the main account (as a balance sheet account) and the offset account (usually as a profit and loss account) remains the same.

Extraordinary depreciation functions like basic depreciation does, which means that a main account is used to credit the depreciation amount to the balance sheet and reduce the value of the fixed asset. An offset account is a profit and loss account, where the depreciation that is calculated for the fiscal period is charged as an expenditure.

Extraordinary depreciation works independently from the basic depreciation. Having extraordinary depreciation as a separate transaction type lets you post and report the extraordinary depreciation separately from the basic depreciation.

You can use special allowance depreciation to take extra depreciation amounts during the first year that an asset is placed in service and depreciated. Special allowance depreciation is available only for depreciation books, not value models, and always is taken before any other depreciation calculations.

You can create an unlimited number of special allowance depreciation records. After you assign them to an asset group depreciation book, the special allowance depreciation records are applied to the asset depreciation book.

Special allowance depreciation is entered as a percentage or a fixed amount. When you post depreciation proposals, special allowance depreciation transactions are posted to the depreciation book as transactions that are separate from the depreciation transactions.

Each depreciation book must have a fiscal calendar that is used when you depreciate fixed assets. You must also select a fiscal calendar for a value model when the associated depreciation method has a fiscal depreciation year, and you use a depreciation method. For more information, see Depreciation books setup (form) and Value models setup (form).

You can create shared calendars using the Fiscal calendars form. (Click General ledger > Setup > Fiscal calendars.) For more information, see Key tasks: Fiscal calendars, fiscal years, and periods.

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