Calculate Depreciation

Inventory Control Menu -> Calculate Depreciation -> Calculate Alternate Depreciation -> Standard option -> Calculate Depreciation

This program can be used to calculate depreciation on the Fixed Assets.
It impacts the standard depreciation only. It calculates the depreciation amount, and stores the calculations in an Edit file that can be reviewed and modified in Review Depreciation Calculations.
Each time the Depreciation Calculation is run, the previous Edit file is discarded and is replaced by the new calculations. This can be useful for testing the depreciation run before the final posting run and updating the Fixed Asset Tags.

Note: To update the Alternative Book Value with depreciated amounts, use the Calculate Alternate Depreciation option.

Refer to the Depreciation Overview for details on both these features.

Depreciation should be run at month end or year end.
It must be run after Post A/P Invoices, Daily Close 1, Daily Close 2, Daily Close 3 and Allocate Bulk Disposals have been completed.
New contracts and Rental Returns must not be entered while the Depreciation Run is in process, otherwise the location on the equipment may change resulting in the depreciation being calculated at the incorrect location.

For examples of how the depreciation is calculated, refer to Depreciation Methods and Depreciation Classes.

To ensure that all items have fixed asset tags, first run the Verify Tag Qty = Loc Qty utility.
To check that all new equipment has been assigned the correct Depreciation Class, run New Acquisitions Report by Depreciation Class. This report can be run for a selected date range.
e.g. Run it for the last month, to check all new equipment setup since last month's depreciation run.

The prompts are:

UNPOSTED SALES OF RENTALS

To calculate depreciation information accurately it is important that any equipment disposals are fully posted and the Fixed Asset Tag information is updated.
A window listing any unposted sales of rental transactions is triggered if there are any currently outstanding disposals, as outlined in Unposted Sales Of Rentals.

DEPRECIATION METHOD

Select one of the following types of Depreciation:

• Select Standard to generate the Depreciation and update the standard Book Value of products according to the following selections and filters.
• Select Alternate to generate the secondary Depreciation and update the alternate Book Value of products as outlined in Calculate Alternate Depreciation.

ALL DEPRECIATION CLASSES

Check this box to include all Depreciation Classes.

Uncheck this box to select a single class or a range of Depreciation Classes.

FROM CLASS

Enter the starting Depreciation Class to include in the run or select it from the Depreciation Class Search window.

TO CLASS

Enter the ending Depreciation Class to include in the run or select it from the window.

ALL PRODUCT CLASSES

Check this box to include all Product Classes.

Uncheck this box to select a single class or a range of Product Classes.

FROM CLASS

Enter the starting Product Class to include in the run or select it from the Product Class Search window.

TO CLASS

Enter the ending Product Class to include in the run or select it from the window.

DATE FOR DEPRECIATION

Enter the date for the depreciation calculation.
Items acquired AFTER this date will be skipped.

PRINT FULLY DEPRECIATED ITEMS

Check this box to include rental items that have been fully depreciated (Book Value = 0) on the depreciation report.
Uncheck this box to skip fully depreciated items, when printing the report later.

INCLUDE ITEMS UNDER SUSPENSION

When non-bulk rental equipment is received into inventory in Warehouse Receiving, it can be automatically flagged as "suspended" to allow for preparation or setup time before it is rented or included in the Utilization analysis statistics.

This feature only applies to non-bulk rental equipment belonging to a Group that is set to Suspend Upon Receipt.
The suspension period is based on the receipt date plus the Days On Suspension After Product Received defined in the Company Inventory Parameters, or is terminated if the equipment is rented.

Check this box to include "suspended" equipment in the depreciation run.
The S column on the report by Depreciation or by Product Class indicates the suspension status when printed from Print Depreciation Report.

Uncheck this box to omit "suspended" equipment from the depreciation run.

Note: This filter does not apply to the Calculate Alternate Depreciation option.

NON-BULK POSTING LOCATION

Select a location to be used as the posting location for the depreciation of non-bulk products:

• Select Inventory to post the depreciation for each non-bulk product to the current inventory location (RSIL).
• Select Owning to post the depreciation for each non-bulk product to the location assigned in the Fixed Asset Tag.

Note: This prompt does not apply to the Calculate Alternate Depreciation option as Alternate Depreciation is not posted to the G/L.

BULK POSTING LOCATION

Select a location to be used as the posting location for the depreciation of bulk products:

• Select Blank to post the depreciation for all bulk products to Head Office, as the quantity currently at the inventory locations cannot be matched exactly with the quantity and values on the tags.
• Select Owning to post the depreciation for bulk products to the owning locations assigned in the Fixed Asset Tags.

Note: This prompt does not apply to the Calculate Alternate Depreciation option as Alternate Depreciation is not posted to the G/L.

OWNING LOCATION, "ALL" OR "SEL"

The Owning Division for rental equipment is defined on the Fixed Asset Tags, as opposed to using the physical location of the product.
Select one of the following options to filter the depreciation calculation by Owning Division:

• Type ALL to include products from all owning divisions in the calculation.
• To generate the calculation for products in a single owning division, leave this field blank for the Head Office Division, or enter a specific division code, or select a division from the drop-down list.
• Type SEL to select a range of owning divisions or to use divisions by accounting region, as outlined in Division Select By Region.

Note: The divisions included in the report output, are NOT limited to the Divisional Restricted Views assigned to the operator.

Finished?

Click ACCEPT to initiate the calculations and to write the preliminary edit records that can be accessed in Review Depreciation Calculations.
Click CANCEL to abort the depreciation run.

Error Report

An Depreciation Error Log will be generated if the depreciation calculation process encounters any errors.

After correcting the errors on the Fixed Asset tags, re-run the Calculate Depreciation program.

Depreciation posted for the Straight Line method can be reversed using the Depreciation Reversal Utility.

Note: Depreciation amounts for the Declining Balance, Straight Line, and Flat Rate methods, will be generated each time the depreciation run is initiated.
Depreciation amounts for the MACRS method are NOT generated if the equipment has already been depreciated to the current month.
Products flagged to not allow depreciation in Update Allow Rental / Depreciation Flag, will NOT be depreciated.

ACTIONS:
Additional actions provided by buttons on the Calculate Depreciation screen include:

• Review Existing Unprocessed Depreciation Calculation Records:
  Click the REVIEW button to access Depreciation records to view, modify, or add them in Review Depreciation Calculations prior to printing and updating the Inventory sub-ledger.

• Review Processed Depreciation Calculation Records:
  Click the HISTORY button to view Depreciation records that have already been processed as outlined in Review Depreciation History.

• Print and Post the Depreciation Information:
  Click the REPORT/POST button to generate the report, as outlined in Print Depreciation Report.
  A printer can be confirmed or re-selected from the Printer option located on the menu bar at the top of the screen.

  When the report is accepted the depreciation values are updated in the Inventory sub-ledger.

Posting Control
The Depreciation programs are designed to be run by one operator at a time per batch.
If a second operator tries to process depreciation, a warning will appear on the screen preventing the second user from proceeding. The conflict in posting is controlled by the Posting Control flag, which is set internally when the first operator initiated the depreciation process.

If for some reason, such as improper software shutdown, the first operator has not exited the Depreciation process properly to release the program, then the Posting Control flag will not be reset automatically to allow the next person to run depreciation. The operator will not be able to proceed until the flag is reset.

The operator will only be able to reset this flag if he has permission to reset the Depreciation posting flag as controlled by his Security Role that is defined in Operators.
Whenever the posting control flag for is reset, a record is written to the Delete Log for the Function RSAD.