Calculate Depreciation

Depreciation calculation will select the next period to depreciate from the Fixed Assets Configuration screen. This screen is automatically updated after each depreciation run has been calculated and posted. The period for the next depreciation run will be displayed. Click the “Next” button to proceed.

Calculate Depreciation

Calculated Depreciation Workbench

The depreciation will be shown in the Calculated Depreciation Workbench.

Calculated Depreciation Workbench

From the Options menu you can run the Depreciation Batch Validation Report.

The Depreciation Batch Validation Report will give you a detailed report on the depreciation batch. If there are any errors, these MUST be fixed prior to posting the batch.

Depreciation Posting Report

Prior to posting the depreciation batch, it is imperative to run the Depreciation Posting Report which provides key information that must be validated.

Depreciation Posting Report

Cancel Depreciation Batch

The depreciation run can be cancelled prior to posting using the Cancel Depreciation function. Select the batch and apply the action.

Cancel Depreciation

You are then able to make any enquiries and correct any issues, then re-run the depreciation for the same period until you are satisfied that the batch can be posted.

Posting Depreciation Batch

The depreciation is then posted and the Next Depreciation Period is automatically changed accordingly.

Depreciation Types

There are two types of calculation.

Cumulative calculation is the standard type in Coins ERP+. This can calculate the depreciation at any stage. It works out what the depreciation start date should be to give the current written down value, and calculates the depreciation based on the final (minimum book) value and the depreciation method. If the depreciation was not calculated for a period, the calculation in the following period takes two periods into account.
Non-cumulative calculation was used in earlier versions of Coins ERP+. It does not take account of when the asset starts to depreciate. If for any reason depreciation was not calculated for a period, the calculation would not take account of this:

To convert to cumulative calculation, use Depreciation Type Conversion.

Depreciation Methods

Coins ERP+ allows for four methods of depreciation:

Straight line (spread evenly over the life of the asset).
Reducing balance (reducing by a percentage of the current value for each period or number of units).

If the rate of depreciation was 20%, the unit was T, and the initial asset value was $100, the asset would depreciate as follows: in the first year, $20; in the second year, $16 (that is, 20% of $80, the WDV at the end of the first year); in the third year, $12.80 (that is, 20% of the WDV at the end of the second year).
Diminishing line (as reducing balance, except that the depreciation is distributed evenly over the year with the gradient of the line changing at year-end).

For example, if the rate is set at 10%, the asset will depreciate 10% in the first year, and in the second year 10% of the value remaining.
True year diminishing line (as diminishing line, except that the change of rate occurs on the anniversary of the asset’s depreciation start date rather than at the end of the company year).

As well as depreciating assets over time, you can also depreciate assets on a different basis, such as mileage or hours used.

Changing Depreciation

When using cumulative depreciation there are three ways to change the course of depreciation for an asset:

Enter Adjustments
An adjustment is the way to make corrections to the primary or secondary depreciation, allowing you to change start date, method, initial and minimum values.
Enter Revaluation
Revaluation is for the rare occasion you decide an asset is incorrectly valued and you want to back out all historical depreciation and begin again from the current period. For example if you had an old vehicle you realised is a collectors item rather than junk. Revaluations only affect the primary depreciation. The value of the revaluation can be captured in revaluation accounts.
Change Asset Economic Life
This is only available for assets depreciated on a straight line basis. It is a process whereby you decide that a group of assets has been depreciated incorrectly. For example you have been depreciating over 3 years, but find you are getting an average life of 5 years. The key difference to entering an adjustment is that you want to kink the straight line, so changing from 3 to 5 years, an asset initially worth $3600, now with WDV of $100 after 35 periods, would depreciate $4 per period for the remaining 25 periods of its life.

See also Asset Depreciation History.

Fixed Asset Depreciation