Historical accumulated depreciation examples—Fixed Assets Management
If your company enters historical accumulated depreciation manually, Fixed Assets Management adjusts depreciation schedules to ensure the following:
The total of all historically posted periods equals the amount that you provided.
The total depreciation across all periods equals the asset’s depreciable cost.
To achieve this, Fixed Assets Management adjusts depreciation in the last historically posted period and the first non-historical period. If necessary, other periods are also adjusted.
The following examples show how different custom historical depreciation amounts affect the depreciation schedule.
Examples
All examples use the following scenario:
Go-live date: June 2nd, 2024
Asset cost: $1,100
Salvage value: $100
Depreciable cost: $1,000
In-service date: April 5th, 2024
Depreciation method: Straight-line
Useful life: 4 months
If your company is configured to calculate historical accumulated depreciation automatically, the schedule amounts are the same as a non-historical asset. The only difference is that periods with scheduled posting dates before the go-live date are considered historically posted.
The system calculates $500 for the total historical depreciation, which is allocated to periods 1 and 2.
| Period | Scheduled posting date | Depreciation amount ($) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 250.00 | Historically posted |
| 3 | June 30th, 2024 | 250.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount is $0. Periods 1 and 2 are reduced to zero, and period 3 is increased to compensate.
| Period | Scheduled posting date | Depreciation amount ($) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 0.00 | Historically posted |
| 2 | May 31st, 2024 | 0.00 | Historically posted |
| 3 | June 30th, 2024 | 750.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount ($50) is significantly less than the system-calculated amount ($500). Period 1 is reduced to zero, period 2 is also reduced, and period 3 is increased to compensate.
| Period | Scheduled posting date | Depreciation amount ($) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 0.00 | Historically posted |
| 2 | May 31st, 2024 | 50.00 | Historically posted |
| 3 | June 30th, 2024 | 700.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount ($400) is less than the system-calculated amount ($500). Period 2 is reduced and period 3 is increased to compensate.
| Period | Scheduled posting date | Depreciation amount ($) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 150.00 | Historically posted |
| 3 | June 30th, 2024 | 350.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount ($600) is more than the system-calculated amount ($500). Period 2 is increased and period 3 is reduced to compensate.
| Period | Scheduled posting date | Depreciation amount ($) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 350.00 | Historically posted |
| 3 | June 30th, 2024 | 150.00 | Not posted |
| 4 | July 31st, 2024 | 250.00 | Not posted |
The user-provided amount ($800) is significantly more than the system-calculated amount ($500). Period 2 is increased, period 3 is reduced to zero, and period 4 is also reduced to compensate.
| Period | Scheduled posting date | Depreciation amount ($) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 550.00 | Historically posted |
| 3 | June 30th, 2024 | 0.00 | Not posted |
| 4 | July 31st, 2024 | 200.00 | Not posted |
The user-provided amount ($1,000) equals the asset’s depreciable cost. Period 2 is increased. Since depreciation is fully accounted for before the go-live date, the remaining periods are set to zero to compensate.
| Period | Scheduled posting date | Depreciation amount ($) | State |
|---|---|---|---|
| 1 | April 30th, 2024 | 250.00 | Historically posted |
| 2 | May 31st, 2024 | 750.00 | Historically posted |
| 3 | June 30th, 2024 | 0.00 | Not posted |
| 4 | July 31st, 2024 | 0.00 | Not posted |
The user-provided amount ($1,100) exceeds the asset’s depreciable cost ($1,000), so Fixed Assets Management prevents this scenario. Historical accumulated depreciation must be less than or equal to the depreciable cost.
