Assigning Depreciation Types to Assets

This page explains how to view and change the depreciation settings for an individual asset. While most assets inherit their depreciation rules from their category (see Assigning Depreciation Types to Categories), you can override the rules at the asset level when different treatment is needed — for example, an asset with a shorter useful life than the category default.

Prerequisites

• You must be in the Fixed Asset Management profile (see Fixed Asset Management Profile).
• You should have an asset record open in the editing screen (see Financial Asset Information).

Accessing Depreciation Setup for an Asset

Open the asset editing screen and click the Depreciation Setup link under the Financials section in the left-hand navigation panel:

This screen shows the depreciation rules for a single book. Use the Book dropdown to switch between books and view or edit the rules for each one.

Understanding Depreciation Rules

Each asset's depreciation setup consists of one or more rules. Each rule defines the depreciation formula applied during a specific date range. This allows you to change the depreciation method over the asset's life.

Note: Asset depreciation profiles always span from 01-Jan-1990 to 01-Jan-2099. The system enforces these boundary dates automatically — you do not need to set them.

Example: Changing Depreciation Method Mid-Life

An asset might use straight-line depreciation until April 2020, then switch to declining balance from May 2020. The rules list would show:

The system automatically calculates the correct charge for each period based on which rule is in effect.

Rule Fields

Each depreciation rule specifies:

Tip: Recovery period, business use, and salvage value only take effect if the chosen formula references them. If you set a salvage value but the formula does not use it, the system will depreciate to zero. Check your formula definition if values are not behaving as expected.

Adding a Rule

To add a new depreciation rule:

1. Click the Add Rule button.

TODO Screenshot (manual): Dialog opened by clicking Add Rule within an asset's depreciation setup. Multipl

2. Select the depreciation formula.
3. Set the start date for the new rule.
4. Enter the recovery period, salvage value, and other parameters as needed.
5. Click Save.

The system automatically adjusts the date ranges of existing rules so that no rules overlap within a book. If you insert a new rule that starts before an existing rule ends, the existing rule's end date is moved back to accommodate the new rule.

Editing a Rule

Click on an existing rule to edit its parameters. You can change the formula, recovery period, salvage value, and other fields. Changes take effect from the next depreciation calculation.

Warning: Changing depreciation rules on an asset that has already been depreciated will affect future calculations but does not retroactively change past transactions. If you need to correct past depreciation, use the Rewind function (see The Monthly Accounting Process) to recalculate from the period where the change should take effect.

When to Override at the Asset Level

Common reasons to override the category default include:

• Shorter useful life — A vehicle with high mileage that will be replaced sooner than the category default
• Different salvage value — An asset with a known resale value different from the category default
• Partial business use — An asset used partly for personal purposes, requiring a reduced depreciation charge
• Policy change for existing assets — When a depreciation policy change applies to specific assets but not all assets in the category

Related Articles

• Assigning Depreciation Types to Categories — Setting category-level defaults
• Assigning Depreciation Types to Many Assets — Changing rules for multiple assets at once
• Depreciation Types — Defining the formulae
• Reviewing Depreciation Setup — Verifying the configuration