Create Depreciation Adjustment – A summary of the activity

This activity allows you to record any difference in depreciation charge. If the depreciation method has been changed from “Straight Line” method to “Written Down Value” method, then there will be some difference in depreciation charged. These differences can be directly debited in the expense account.

For Example

The total depreciation charged for using the “Straight Line” method is $20,000. After change of method, the depreciation charged is $30,000. The increase in the depreciation charge is debited to the depreciation expense account. If there is a decrease in depreciation charge after change in method, the difference amount is credited.

The system computes the depreciation total. The system generates a unique document number based on the numbering type selected. The system updates the status of the adjustment document to “Active”. The system posts the accounting entry in the depreciation book and the posting cost center. The system updates the status of the asset/tag number, depreciation book and the financial period to “Processed”.

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