Examples: Depreciation effects with reversals [AX 2012]

Updated: December 10, 2010

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

You can reverse fixed asset transactions, and the transactions that are associated with a fixed asset. You can also revoke a reversed transaction.

You can reverse or revoke a transaction that was not the most recent transaction posted to the value model or depreciation book for the asset. You should first determine whether any depreciation transactions were posted after the transaction that you are reversing. This is because depreciation is not recalculated when you reverse a transaction. Therefore, depreciation often is overstated or understated after the reversal, as shown in the examples.

To make sure that depreciation is correct when you reverse a transaction, do not continue with the reversal if you receive a message that states that depreciation will not be recalculated. Instead, first reverse the depreciation transaction that was posted after the transaction you tried to reverse, and then continue with the reversal. You will not be warned about depreciation recalculations, and you can continue with the reversal.

The following examples show the calculations that occur if you continue beyond the message without first reversing the depreciation transactions.

An asset is set up with a 5-year useful life and straight line depreciation (60 depreciation periods). In this example, depreciation is overstated.

Date

Transaction type

Amount

January 1

Acquisition

59,000.00

January 1

Acquisition adjustment

1,000.00

January 31

Depreciation (created by using a proposal for one period of depreciation)

1,000.00

Calculation: Book value (59,000 + 1,000) / Number of depreciation periods remaining (60)

Date

Transaction type

Amount

January 1

Acquisition adjustment reversal

–1,000.00

Date

Transaction type

Amount

February 28

Depreciation (proposal)

983.05

Calculation: Book value (59,000 - 1,000 depreciation) / Number of depreciation periods remaining (59)

Depreciation is overstated by 16.95 (1,000 - 983.05).

An asset is set up with a 5-year useful life and straight line depreciation (60 depreciation periods). In this example, depreciation is understated.

Date

Transaction type

Amount

January 1

Acquisition

59,000.00

January 1

Write-down adjustment

1,000.00

January 31

Depreciation (created by using a proposal for one period of depreciation)

966.67

Calculation: Book value (59,000 - 1,000) / Number of depreciation periods remaining (60)

Date

Transaction type

Amount

January 1

Write-down adjustment reversal

–1,000.00

Date

Transaction type

Amount

February 28

Depreciation (proposal)

983.62

Calculation: Book value (59,000 - 966.67 depreciation) / Number of depreciation periods remaining (59)

Depreciation is understated by 16.95 (983.62 - 966.67).


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