Asset Depreciation Setup – An overview

Introduction

Depreciation Setup covers the master data to be defined that will be used for calculating depreciation for an asset. The setting up of depreciation rules across various depreciation books are handled by this component. The depreciation setup process includes definition of Depreciation Books, Depreciation Rule, Depreciation Category and mapping a depreciation category to a depreciation rule.

Feature Highlights

• Three types of depreciation methods are supported in this component. They are:

• • Straight Line Method

  • Reducing Balance Method

  • Sum-of-the-years digit Method.

• Definition of user-defined depreciation rules for calculating depreciation with different combination of rates, methods, basis, limits and conventions.

• Supports defining multiple depreciation books for meeting different requirements e.g. books for corporate accounts, tax, costing, management reporting etc along with different calendars.

• Different depreciation methods or rates can be applied on the same asset for the purpose of different depreciation books. For example, an asset may be depreciated under straight line method for corporate accounting purposes whereas the same asset may be depreciated under reducing balance method for income tax law purposes.

• Depreciation rules defined is a combination of depreciation properties that will be assigned to a depreciation category. When the assets are depreciated, the method of depreciation, applicable rates for depreciation etc. will be obtained from the depreciation rule to which the assets have been mapped. Grouping assets based on common depreciation parameters can be identified through the definition of depreciation category.

List of Activities