How to fully depreciate an asset in the next depreciation run?

Let’s say you (or your boss) wants to depreciate a particular asset completely in the next depreciation run, this is what you will need to do. This is only if the asset is not being retired but will remain on the books.

The key is to change the Original Life of the asset so that the Remaining Life becomes equal to the number of days for the month you will be depreciating. And when you save this new Original Life, you will need to choose “Recalculate” as the depreciation recalculation method. We do this because we do not want to change any historical depreciation information.

Once you update the original life for the asset(s), all other steps are the same as usual.

Let’s walk through an example to illustrate this scenario and the solution better. The first screenshot you see below gives you the state of the Asset Book before any changes are done. The asset has been depreciated through 09/30/2011, the remaining life is 3 years and 22 days, and the net book value is $58,000.00.

We need to update the remaining life to 31 days, since the next depreciation period is October. Because we cannot directly change the remaining life, we need to update the original life so that we get the remaining life we want.

If we subtract the Remaining Life from the Original Life, we get the total life of the asset so far – which is 1 year and 138 days. For the new remaining life to be 31 days, we need to add 31 days to that number. So when we plug 1 year and 169 days into the original life, our remaining life now says 31 days, which is exactly what we want.

Since you have changed a depreciation sensitive field, the system will need to recalculate the depreciation. So click “Yes” on the pop up window.

If you do not want to change any historical depreciation information, you will select “Recalculate” here.

Now, you can depreciate the asset as you would normally do. Here are the results.  You can see that the current depreciation amount is $58,000, the fully depreciated flag is set to Y, and the remaining life is 0.