COMPUTE DEPRECIATION

Use this screen to initiate the depreciation calculation process for one, a range of, or all asset records. You can calculate depreciation for asset records assigned to a range of asset accounts, organizations, and/or projects.

For each eligible, depreciable Asset Master record for which the Auto Calculate Depreciation check box has been selected in the G/L Book Info tab of the Manage Asset Master Information screen (or in the corresponding field on the Manage Asset General Ledger Book Information screen), the system computes and writes a value into the Current Pd Depreciation or Current Pd Amortization field, as appropriate. The current period depreciation value is computed only if depreciation is based on years or units. If depreciation is based on lease periods, the value is copied from the Monthly Amount field to the Current Pd Amortization field (G/L Book Info tab of the Manage Asset Master Information screen).

The calculation of depreciation has no effect on the posting of depreciation. Once the Current Pd Depreciation field has been populated with a value other than zero, it must be posted or zeroed out before the current accounting period can be closed in Costpoint Fixed Assets.

The following requirements must be met for an Asset Master record before depreciation calculations can proceed for that record:

The Asset Master record asset/item number must be within the asset/item number parameter(s) selected on this screen, the Compute Depreciation screen.
The asset account/organization/project combination assigned to the Asset Master record must be within the acct/org/proj parameter(s) selected on the Compute Depreciation screen.
The Asset Master record must be active (Record Status must be Active on Manage Asset Master Information screen).
The Asset Master record must be depreciable (Depr Status must be Depreciable on Manage Asset Master Information screen).

For a depreciable record in which depreciation is based on Years, you must assign a valid depreciation method before you can save the Asset Master record. Enter depreciation methods in the Depr Method Code field in the G/L Book Info tab and the Other Books Info subtask of the Manage Asset Master Information screen, as applicable.

The auto-calculation function for the Asset Master record must be enabled (the Auto Calculate Depreciation or Auto Calculate check box is selected in the G/L Book Info tab and in the corresponding fields in the Other Books Info subtasks of the Manage Asset Master Information screen, as applicable].
The Asset Master record must have a start date that is on or before the last day of the Fixed Assets (FA) current fiscal year and accounting period. (The current FA fiscal year, period, and subperiod are displayed on the Configure Posting Settings screen.) You can enter the start date in the following fields, tab and subtask of the Manage Asset Master Information screen:

Depr Start Date field (depreciation based on Years or Units) in the G/L Book Info tab
Amortization Start Date field (depreciation based on Lease Periods) in the G/L Book Info tab
Depr Start Date field in the Other Books Info subtask
The Asset Master record timing status must be valid:

The current depreciation year (Current Depr Yr field in the G/L Book Info tab) must not be greater than the total years of useful life specified in the Years of Useful Life field from the Manage Depreciation Methods screen (not from the Useful Life field from the G/L Book Info tab or the Other Books Info subtask, as applicable).
The remaining time periods must be greater than zero (Days/Pds Remaining field from the G/L Book Info tab or the Other Books Info subtask, as applicable). If depreciation is based on leases, the Lease Pds Remaining field from the G/L Book Info tab must be greater than zero.

To prevent the over-depreciation of an asset, if the current period depreciation amount computed by the system is greater than the book value of the asset, the system will reduce the current period amount by the excess (if the Auto Calculate Depreciation or Auto Calculate check box is selected) on a one-time basis in the current period.

The period for which you are computing depreciation must be set up as the current period on the Configure Posting Settings screen, and the fiscal year and period must exist on the Manage Fixed Assets Fiscal Years and the Manage Fixed Assets Accounting Periods screens. In addition, at least the next fiscal year and its corresponding periods must be set up on the Manage Fixed Assets Fiscal Years and the Manage Fixed Assets Accounting Periods screens.

If you are computing projected depreciation for future fiscal years, each future fiscal year and its corresponding periods must also be set up on the Manage Fixed Assets Fiscal Years and the Manage Fixed Assets Accounting Periods screens.

Five general factors can affect the computation of depreciation based on years:

System-Wide Configuration for Depreciation Calculations

Depreciation calculations can be configured on a system-wide basis on the Configure Fixed Assets Settings screen. You can select one of two methods for computing "Catch-Up" amounts for prior periods missed in a current depreciation year (Purchase Year or Fiscal Year). The options include spreading the "Catch-Up" amount among the remaining periods in the PY (purchase year) or FY (fiscal year), or adding the "Catch-Up" amount to the amount computed for the current period.

Although you can change the configuration after you have initialized the system, your company should make this decision as part of the initialization procedures.

Use of Date of Purchase or Fiscal Year Depreciation Basis with Depreciation Method

The Date of Purchase or Fiscal Year depreciation basis that you specify for each depreciation method determines the specific formula that will be used to compute depreciation. Note that different formulas may be used within the same asset record because depreciation methods are assigned on a book-by-book basis for each asset record.

It is important that you decide on either the Date of Purchase or Fiscal Year depreciation basis for the depreciation methods that you assign to your Asset Master records BEFORE you compute depreciation for the first time. If you assign a different depreciation method that has a different basis to a record AFTER depreciation has begun, you will need to make extensive manual edits to fields in the Asset Master record before computations will proceed correctly.

When you assign a Date of Purchase depreciation basis method to any book in an Asset Master record, the depreciation year begins on the date (or month) of purchase and continues for one year from the purchase. This timeframe usually crosses fiscal years (except for assets purchased in the first month of the fiscal year).
When you assign a Fiscal Year depreciation basis method to any book in an Asset Master record, the system allocates the full year's depreciation percentage within the current fiscal year, regardless of the period of acquisition within the fiscal year. (The annual depreciation computation will be the same, whether the asset is acquired in the first, second, third, and so on, period of the fiscal year.)

Special System-Wide Configuration for Date of Purchase Depreciation Basis Methods.

When you establish each depreciation method on the Manage Depreciation Methods screen, you must specify whether the method uses the Date of Purchase or Fiscal Year depreciation basis. If you have specified a Date of Purchase depreciation method basis for use in any book in an Asset Master record, you must also specify the configuration to use during calculations. The System-Wide Configuration for DP (Date of Purchase) Basis Depreciation Methods is established on the Configure Fixed Assets Settings screen.

If you have assigned a Date of Purchase basis to one or more depreciation methods on the Manage Depreciation Methods screen and if you have also selected the "Catch-Up" calculation option (Added to current period amount option) on the Configure Fixed Assets Settings screen that adds missed depreciation for prior periods in the current year to the current period depreciation amount, the system will display a soft warning information message about your selections.

In order to ensure the proper calculation of depreciation under these conditions, make sure that you have first set up historical fiscal year and period data on the Manage Fixed Assets Fiscal Years and Manage Fixed Assets Accounting Periods screens. Please refer to the documentation for these screens for additional information.

You should set up this data on a one-time basis for each year specified in the depreciation start date assigned to your Asset Master records (for which there is remaining book value). (Make sure that you Insert the earlier fiscal years into the Manage Fixed Assets Fiscal Years screen instead of using the New Record function.)

Alternately, if you do not want to add historical fiscal year and period data on the Manage Fixed Assets Fiscal Years and Manage Fixed Assets Accounting Periods screens, you can change the "Catch-Up" calculation option on the Configure Fixed Assets Settings screen to spread missed depreciation for prior periods among the remaining periods in the current year.

You can choose to spread annual depreciation evenly throughout the purchase year or to compute current period depreciation based on the actual number of days in the current period.

You should decide on the configuration for use at your company before initialization. If you change the configuration after depreciation has been computed, subsequent depreciation calculations will be incorrect. To ensure that future calculations are correct when you change the configuration, you must manually edit the Days/Pds Remaining field for each Asset Master record.

You can compute current period depreciation based on the following:

Number of Periods in a Purchase Year

If you select this option, the system will spread annual depreciation evenly throughout the purchase year. Unless you have made changes to key fields used in the computation, this option will compute consistent current period depreciation values from period-to-period across the purchase year among periods that contain inconsistent numbers of days. Most users select this option.

The Actual Number of Days "Owned" in Each Period

If you select this option, the system will compute current period depreciation based on the actual number of days in the current period. This option will compute varying current period depreciation values from period-to-period across the purchase year, depending on the number of days in the current period. (For this configuration, the system uses a standard value of 365 days in a year (366 for a leap year) for calculations.) Few users select this option because there are more complex initialization and maintenance issues.

Data Entered for Depreciation Method

Data entered for the depreciation method assigned to any book of an Asset Master record can also influence the calculation of depreciation. These factors can include the following types of data from the Manage Depreciation Methods screen:

Years of Useful Life
Total % to Depreciate
% Depreciation Per Year
Basis - Date of Purchase or Fiscal Year (discussed in previous paragraphs)
Subtract Salvage Value Before Calculation check box

Data Entered in Asset Master Record

Data entered in an Asset Master record can also influence the calculation of depreciation. These factors can include the following types of data, as applicable:

From Manage Asset Master Information screen:

Depreciation Based on Years, Units of Usage, or Lease Pds

From Cost Info tab and Other Books Info subtask:

Total Cost
From G/L Book Info tab and Other Books Info subtasks:
Auto Calculate Depreciation (Y/N)
Depr Method Code
Depr Start Date
Current Depr Yr
Days/Pds Remaining
Amt Taken Purch YTD (for Date of Purchase Basis only)
Salvage Percent
Salvage Value
FYTD Depreciation
Prior FY Depreciation
Estimated Units Useful Life
Std Depr Rate Per Unit of Usage
Prior Units Used
Current Units Used
Total Lease Value
Monthly Payment
Lease Payments Remaining
Amortization Start Date
FYTD Amortization
Prior FY Amortization

A technical discussion along with specific examples of how the system calculates depreciation using different configurations and conditions can be found in Related Topic, Calculate Depreciation.

You can calculate depreciation at any time within an accounting period. In addition, you can run depreciation computations multiple times within the same accounting period. As a general procedure, however, you should calculate depreciation after you have added all the new asset records for the period and have reconciled the appropriate accounts with the General Ledger.

The Asset Master records in Costpoint Fixed Assets serve as a subsidiary ledger to the General Ledger. As a result, you should always perform a reconciliation of Costpoint Fixed Assets account balances for the asset and accumulated depreciation accounts with your General Ledger balances. The detail from Costpoint Fixed Assets should reconcile to the summary totals in your General Ledger. You can use the Print Fixed Assets/General Ledger Reconciliation Report from the Fixed Assets Reports menu option to assist you with this reconciliation function.

Ideally, you should perform a reconciliation at the time of initialization and each month thereafter, after you have closed the Fixed Assets current accounting period but before you have computed depreciation for the next period. Before you calculate depreciation, you should make certain that these reconciliations have been performed and any discrepancies have been remedied.

The calculation of depreciation is an optional procedure. It is possible to close a current period in Costpoint Fixed Assets without computing or posting depreciation.

Make certain that you establish control procedures at your company to ensure that depreciation calculation(s) are performed at the desired time period(s) consistent with your overall processing schedule.

A Fixed Assets monthly procedures workflow has been created for you in Costpoint Workflow. You may want to use this as a guide in establishing the Fixed Assets procedures at your company.

If a post sequence number exists for any asset, the system stops the compute depreciation process and displays an error message. Sequence numbers display on the Manage Asset Master Information screen only for entries that were unsuccessfully posted or if the system is in the process of posting the entry. After the entry has been successfully posted for the asset, the sequence number will no longer display in the Asset Master record. Once the sequence number disappears, you can continue with the compute depreciation process.

If the Fixed Assets period close process fails and rows exist in the Post Semaphore table, you will not be able to execute the Compute Depreciation process. In this event, you should either wait until the close process is completed successfully or restart the failed close process before re-running the calculation process.

Identification

Use the fields in this block to create a new parameter ID or to retrieve a previously saved parameter ID. A parameter ID represents a set of screen selection parameters. After you have saved a parameter ID and its related parameters, you can retrieve them using Query.

You can use the retrieved parameters to produce reports and run processes more efficiently and with greater consistency. The saved parameters are also useful and necessary when you want to run the process as part of a batch job. Many users save a unique set of parameters for each different way they run a report or process. When you select a previously saved parameter ID or parameter description, the associated saved screen selection parameters automatically display as selection defaults. The page setup and print options are also included in the saved parameter ID if there are any. You can change any of the associated selection defaults as necessary.

Parameter ID

Enter, or click to select, a parameter ID of up to 15 alphanumeric characters. Choose characters for your parameter ID that help identify the type of selections you made in the screen, such as PERIOD or QUARTERLY.

When you save your record, all the selections made in the screen are stored with the parameter ID. Later, you can retrieve the parameter using Query.

You can use the parameter to run the process more efficiently because you can select the parameter ID with its previously defined screen selections. After the default selections display in the screen, you can override the defaults.

Description

Enter, or click to select, a parameter description of up to 30 alphanumeric characters.

Selection Ranges

Asset/Item Numbers

You can calculate depreciation for a range of asset/item numbers that you can specify in the following fields. The selection of records from within the asset number/item number(s) that you specify may be modified by your selection of asset account, organization, and/or project range, as well as by system criteria regarding the selection of eligible records to include in the computation.

Option

Start

Enter, or click

to select, the beginning asset/item number for the range. Because this is a standard Lookup to the ASSET table, you may find that you have selected asset/item numbers for which depreciation cannot be computed or for non-depreciable assets.

If you select All or From Beginning in the Option field, this field will be inactive.

End

Enter, or click

to select, the ending asset/item number for the range. Because this is a standard Lookup to the ASSET table, you may find that you have selected asset/item numbers for which depreciation cannot be computed or for non-depreciable assets.

If you select All, One or To End in the Option field, this field will be inactive.

If you enter only an asset number, you cannot run the calculation process until you have entered a corresponding item number.

Asset Accounts

Asset "ownership" data is a required entry in the Acct Info tab of the Manage Asset Master Information screen (and on the Manage Asset Account Information screen) for all property records. Account and organization are always required, but projects are only required with project-required accounts and reference numbers are optional. The account/org/proj/ref1/ref2 data that you assign to an asset specifies "ownership," and can include company-owned balance sheet combinations, expense combinations, project combinations, and so on.

The selection of records from within the account(s) that you specify may be modified by your selection of asset/item number, asset organization, and/or project range, as well as by system criteria regarding the selection of eligible records to include in the computation.

Only asset acct/org/project combinations that have been previously validated and assigned to Asset Master records will be selected from within the parameters that you specify.

Option

Start

Enter, or click

to select, the beginning asset account. Because this is a standard Lookup to the ACCT table, you may find that you have selected accounts for which asset data do not exist.

If you select All or From Beginning in the Option field, this field will be inactive.

End

Enter, or click

to select, the ending asset account. Because this is a standard Lookup to the ACCT table, you may find that you have selected accounts for which asset data do not exist.

If you select All, One, or To End in the Option field, this field will be inactive.

Asset Organizations

Asset "ownership" data is a required entry in the Acct Info tab of the Manage Asset Master Information screen and on the Manage Asset Account Information screen for all property records. Account and organization are always required, but projects are only required when the Asset Account requires a project. The account/org/proj/ref1/ref2 data that you assign to an asset specifies "ownership" and can include company-owned balance sheet or expense accounts, projects, and so on.

You can calculate depreciation for a range of organizations. The selection of records from within the organizations(s) that you specify may be modified by your selection of asset/item number, asset account, and/or project range, as well as by system criteria regarding the selection of eligible records to include in the computation.

Only asset acct/org/project combinations that have been previously validated and assigned to Asset Master records will be selected from within the parameters that you specify.

Option

Start

Enter, or click

to select, the beginning organization. Because this is a standard Lookup to the ORG_ACCT table, you may find that you have selected organizations for which asset data do not exist.

If you select All or From Beginning in the Option field, this field will be inactive.

End

Enter, or click

to select, the ending organization. Because this is a standard Lookup to the ORG_ACCT table, you may find that you have selected organizations for which asset data do not exist.

If you select All, One, or To End in the Option field, this field will be inactive.

Asset Projects

Asset "ownership" data is required entry in the Acct Info tab of the Manage Asset Master Information screen and on the Manage Asset Account Information screen for all property records. Account and organization are always required, but projects and reference numbers are optional. The account/org/proj/ref1/ref2 data that you assign to an asset specifies "ownership" and can include company-owned balance sheet or expense accounts, projects, and so on.

You can calculate depreciation for a range of projects. The selection of records from within the project(s) that you specify may be modified by your selection of asset/item number, asset account, and/or organization range, as well as by system criteria regarding the selection of eligible records to include in the computation.

Only asset acct/org/project combinations that have been previously validated and assigned to Asset Master records will be selected from within the parameters that you specify.

Option

Start

Enter, or click

to select, the beginning project. Because this is a standard Lookup to the PROJ table, you may find that you have selected projects for which asset data do not exist.

If you select All or From Beginning in the Option field, this field will be inactive.

End

Enter, or click lookup to select, the ending organization. Because this is a standard Lookup to the PROJ table, you may find that you have selected projects for which asset data do not exist.

If you select All, One, or To End in the Option field, this field will be inactive.

Options

You may have Asset Master records in which there is no remaining useful life, yet small residual book value amounts still exist. In the past, the only remedy for this problem was to manually enter the residual amount of book value into the current depreciation field for each affected record and post depreciation again.

The computation option on this screen provides a simple solution to the problem of residual book value existing for assets that have no remaining useful life. If you select the check box in this group box, the system will populate the current period depreciation amounts with the remaining book value for assets in which there is no remaining useful life, in all applicable books.

For the G/L book, the residual amount of current period depreciation expense computed by the system can be subsequently posted to fully depreciate these assets and reduce their book value to "0." For your optional other books, although the residual amount of current period depreciation is never posted to the G/L, it will be considered as part of the depreciation expense during the close and will reduce the book value to "0" as well.

You can include or exclude assets in which the auto calculation option has been set to Y or N.

Update Current Period Depreciation Amount with Remaining Book Value

Select this check box if you want the system to populate the current depreciation amount with the remaining book value for assets that have no remaining useful life.

The system determines that an asset has no remaining useful life when the values in both the Current Depr Yr and Days/Pds Remaining fields are "0."

If you select this check box, you must also select at least one check box in the Include Assets in Which group box, in which check boxes are all clear by default.

Include Assets in Which

Use the check boxes in this group box to select the auto calculation status of the records in which the system will populate the current depreciation amount with the remaining book value.

The default status of each check box is clear, and you must select at least one check box.

Auto Calc = "Y"

Select this check box if you want the system to populate the current depreciation amount with the remaining book value for assets in which the Auto Calc flag is Y.

Auto Calc = "N"

Select this check box if you want the system to populate the current depreciation amount with the remaining book value for assets in which the Auto Calc flag is N.

Current FY/PD Information

The fields in this group box display the fiscal year, period, and subperiod for which depreciation will be computed.

Fiscal Year

The current fiscal year from the Configure Posting Settings screen displays in this non-editable field. Because only one period at a time is open in Costpoint Fixed Assets, you cannot compute depreciation for a period in any other fiscal year.

Period

The current accounting period from the Configure Posting Settings screen displays in this non-editable field. Because only one period at a time is open in Costpoint Fixed Assets, you cannot compute depreciation for any other period.

Subperiod

The subperiod from the Configure Posting Settings screen displays in this non-editable field, although it is actually not used in depreciation calculations. Regardless of the subperiod that displays in this field, the system computes depreciation only for the current accounting period in total. The subperiod from the Configure Posting Settings screen is used by the system only to determine which subperiod the system should use to post the Fixed Assets (FA) Journal to the General Ledger.

The Subperiod field is the only editable field in the Configure Posting Settings screen once you have completed the first Fixed Assets posting. It is used only during posting routines in Costpoint Fixed Assets and is ignored during depreciation calculations. Although you can change the subperiod on that screen, you cannot enter a subperiod assigned with a Not Available status. (Subperiod status is assigned on the Manage Subperiods screen in Costpoint General Ledger.) In addition, you must assign the Fixed Assets Journal an Open status for the subperiod on the Manage Subperiods screen before you can compute depreciation for this fiscal year/period/subperiod combination.

Compute Depreciation

Click

drop-down and select Compute Depreciation on the toolbar to initiate the depreciation calculation process.

Compute Depreciation/Print Error Report

Click

drop-down and select Compute Depreciation/Print Error Report on the toolbar to initiate the depreciation calculation process.

The system computes all eligible records and does not stop the process if there are errors. The system automatically creates and prints an error report when the compute process is complete.

"No errors found" will display on the report if no errors are encountered during the computation.

If the system cannot compute depreciation because of specific circumstances, the error report will display the error message along with the asset/item(s) to which it applies, as follows:

The system generates this message if there is a database error. Check with your database administrator to resolve this type of error.

The system generates this message when there is insufficient data to perform the calculation. You can add the missing fiscal year data or edit the depreciation start date, as appropriate.

The system generates this message when fiscal year sequence numbers are missing or skipped in the numerical order. Contact Deltek Technical Support for assistance on how to correct this condition.

Once you have corrected the error condition, you can compute depreciation again for the error records, as desired.