(IND) Calculate and post depreciation for a fixed asset group using depreciation books [AX 2012]

Updated: October 17, 2012

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

NoteNote

This topic has not been fully updated for Microsoft Dynamics AX 2012 R2.

You can calculate depreciation for a fixed asset group based on the number of days defined in the Asset group depreciation threshold field in the General ledger parameters form. The following table shows the various formulas that are used to calculate asset group depreciation.

Type of proposal

Number of days the asset is used

Formula

Depreciation

Equal to or more than the number of days defined in the Asset group depreciation threshold field

(Net book value of the fixed asset group on the date of depreciation) * (Rate of depreciation defined for the depreciation profile)

Depreciation

Fewer than the number of days defined in the Asset group depreciation threshold field

(Net book value of the fixed asset) * (Depreciation threshold percentage defined in parameters) * (Rate of depreciation defined for the depreciation profile)

Bonus depreciation

Equal to or more than the number of days defined in the Asset group depreciation threshold field

(Cost of acquisition) * (Rate of depreciation defined in the depreciation profile)

Bonus depreciation

Fewer than the number of days defined in the Asset group depreciation threshold field

(Cost of acquisition) * (Depreciation threshold percentage defined in the General ledger parameters form) * (Rate of depreciation defined in the depreciation profile)

Example

You own Machinery A, B, and C on April 1, 2008. The written-down value of machinery A is INR 70,000, Machinery B is INR 1,64,000, and Machinery C is INR 84,000. The rate of depreciation is 15 percent. You purchased Machinery D for INR 60,000 on November 2, 2008. On March 15, 2009, Machinery B is sold for INR 1,80,000 and Machinery C is sold for INR 40,000.

The calculated written-down value of the group of assets on March 31, 2009 = INR 1,58,000 (INR 3,18,000 + INR 60,000 – INR 2,20,000). This is calculated by adding the amount of the new machinery to the sum of the written-down value of Machinery A, B, and C and then deducting the sale proceeds of Machinery B and C.

You must calculate depreciation on the asset that is used for fewer than 180 days at the rate of 7.5 percent, which in this case is INR 4,500 (INR 60,000 * 7.5%). The depreciation on the remaining amount of the written-down value of the group of assets is calculated at the rate of 15 percent, which is INR 14,700.

On March 31, 2009, you must deduct the amount of depreciation from the written-down value of the group of assets (INR 1,58,000 – INR 60,000 = INR 98,000) to calculate the written-down value of the group of assets on April 1, 2008, which is INR 1,58,000 – INR 19,200 = INR 1,38,800.

NoteNote

Depreciation is not calculated for the asset group that has a zero written-down value. If the sale amount of all assets or some assets in a fixed asset group is greater than the net book value of the group during a year, it is considered a short-term capital gain, so it will have a zero written-down value. If the sale amount of all assets in a fixed asset group is less than the net book value of the fixed asset group, it is considered a short-term capital loss, so it will have a zero written-down value.

If the positive or negative amount is entered in the Debit field of a journal line, the same amount is updated in the Fixed asset balances form. However, if a positive amount is entered in the Credit field, the amount is updated as negative and the negative amount in the Credit field is updated as a positive amount in the Fixed asset balances form.

  1. Click Fixed assets > Journals > Depreciation book journal.

  2. Create a new depreciation book journal.

  3. Select a depreciation book journal name in the Name field.

  4. Click Lines.

  5. Select a transaction type in the Transaction type field.

  6. Select a fixed asset number in the Fixed asset number field.

    NoteNote

    The Fixed asset number field is not available in the journal line when a fixed asset group and depreciation book is selected with the Depreciation or Depreciation adjustment transaction type, and the Asset group depreciation check box is selected.

  7. Select a fixed asset group in the Fixed asset group field.

  8. Enter an amount in the Debit field or the Credit field.

  9. Click Proposals to generate different types of proposals for fixed asset groups for which the Asset group depreciation check box has been selected, and then click OK.

    NoteNote

    You can create an acquisition, depreciation, revaluation, or bonus depreciation proposal.

  10. Click Post to post the journal, or post lines with no errors and transfer the lines with errors to a new journal.

    NoteNote

    The totals of the amounts that are entered for the fixed asset numbers with the same fixed asset group and transaction type are updated in the Fixed asset balances form (Click Fixed assets > Common > Fixed assets > Fixed assets. Select a fixed asset. On the Action Pane, click Depreciation books. Select a depreciation book and then click Inquiry > Balance.).

    For example, you post an acquisition type of journal voucher for fixed asset numbers Book 1 and Book 2 in a fixed asset group. You enter INR 20,000.00 for Book 1 and INR 30,000.00 for Book 2. The total amount of INR 50,000.00 is displayed in the Acquisition field of the Fixed asset balances form.

    A new journal line is created for the proposal type, and the amount that is entered in the Debit field or the Credit field is updated in the Fixed asset balances form (Click Fixed assets > Common > Fixed assets > Fixed assets. Select a fixed asset. On the Action Pane, click Depreciation books. Select a depreciation book and then click Inquiry > Balance.).

    NoteNote

    Asset group depreciation is not applicable for Consumption depreciation, Revenue recognition of reserves, and Extraordinary depreciation types of proposals.


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