Define Depreciation Categories

OBJECTIVE

The Define Depreciation Categories option allows creating different depreciation categories to which are linked each fixed asset that must be depreciated. This option can be used on the fiscal fixed assets categories model (i.e. rolling stock material).

The categories which allow to determine the accounting charge that will be linked to each fixed asset attached to the category, as much for the depreciation expense than the cumulated depreciation expense.

These settings are used as a last resort, if no other accounting charge was previously determined.
The accounting charge can pass through a Project/Activity/Group or simply be a general ledger account.

The depreciation plan allows to group fixed assets by category, if so desired. There are two important options that are also linked to categories:

Being able to limit the equipment depreciation calculation to those that are located in projects who generated a revenue during the month.
- The logic behind this is that pieces of equipment located in projects that have not generated any revenue were most probably not used and therefore have no depreciation expenses.
- This situation mostly applied to pieces of equipment for which the depreciation is mostly caused by use (and not time).
Being able to substitude a piece of equipment that was not completely depreciated for a completely depreciated one, when the completely depreciated piece of equipment is localized in a project with revenue.
- Using this option is logically linked to the activation of the last option.
- It comes counterbalance the fact that certain pieces of equipment that are entirely depreciated can be located in active projects, whereas others, that are not completely depreciated, can be located in inactive projects.

Steps

maestro* > Accounting > Financial Management > Depreciation > Define Depreciation Categories

Create a depreciation category

Enter the required information in the Main Fields tab:

Fields followed by the * character are mandatory fields.

Field

Description

Category*

Code that identifies the category. The Configuration icon is used to define entry options for the Depreciation Category field.

Description*

Description that identifies the depreciation category.

Project where the equipment is located must have revenue to calculate depreciation

Tells the system that the equipment in this depreciation category must not be depreciated if the project on which they are located have not generated revenue during the month, if the box is checked.

NOTE: This field is only available if the Equipment module is installed.

Switch an equipment not completely depreciated to an equipment completely depreciated on a project with revenue

Tells the system to force substitution of completely depreciated equipment with other equipment that is not completely depreciated if it is located on a site that generated revenue during the month, if the box is checked.

NOTE: This field is only available if the Equipment module is installed.

Distribution / Expense

Expense project, activity and group used by default to post the depreciation expense.

NOTE: If these fields are used, the fields associated with the general ledger must be empty.

Accumulated Depreciation

Expense project, activity and group used by default to post the accumulated depreciation.

NOTE: If these fields are used, the fields associated with the general ledger must be empty.

Account / Expense

General Ledger

General ledger account used by default to post to the depreciation expense.

NOTE: If these fields are used, the fields associated with the project must be empty.

Account / Accumulated Depreciation

General Ledger

General ledger account used by default to post to the accumulated depreciation for this depreciation category.

NOTE: If these fields are used, the fields associated with the project must be empty.

Fields followed by the * character are mandatory fields.
Field	Description
Category*	Code that identifies the category. The Configuration icon is used to define entry options for the Depreciation Category field.
Description*	Description that identifies the depreciation category.
Project where the equipment is located must have revenue to calculate depreciation	Tells the system that the equipment in this depreciation category must not be depreciated if the project on which they are located have not generated revenue during the month, if the box is checked. NOTE: This field is only available if the Equipment module is installed.
Switch an equipment not completely depreciated to an equipment completely depreciated on a project with revenue	Tells the system to force substitution of completely depreciated equipment with other equipment that is not completely depreciated if it is located on a site that generated revenue during the month, if the box is checked. NOTE: This field is only available if the Equipment module is installed.
Distribution / Expense	Expense project, activity and group used by default to post the depreciation expense. NOTE: If these fields are used, the fields associated with the general ledger must be empty.
Accumulated Depreciation	Expense project, activity and group used by default to post the accumulated depreciation. NOTE: If these fields are used, the fields associated with the general ledger must be empty.
Account / Expense General Ledger	General ledger account used by default to post to the depreciation expense. NOTE: If these fields are used, the fields associated with the project must be empty.
Account / Accumulated Depreciation General Ledger	General ledger account used by default to post to the accumulated depreciation for this depreciation category. NOTE: If these fields are used, the fields associated with the project must be empty.

Click Save.

Define Depreciation Categories

OBJECTIVE

Steps

Create a depreciation category

See also