You must run depreciation to account for every transaction that you perform on an asset. For example, when you transfer an asset, you may need to run depreciation to correctly reflect the new department that is using the asset. For some transactions (including adjustments, transfers, and recategorizations), the depreciation calculation process moves the stored depreciation amounts from department to department or category to category, depending on the transaction that you are performing and the ChartFields that you specify.
In This Article:
- How to navigate run depreciation
- How to create depreciation accounting periods
Follow these steps to process depreciation:
- Run the Depreciation Calculation Application Engine process (AM_DEPR_CALC).
- Review open transactions.
- Change depreciation attributes and expand periods as needed.
- Review the depreciation processing results for errors.
- Create pending depreciation transactions.
- Create period depreciation accounting entries.
- When you have completed processing depreciation, you must go on to create accounting entries for the period depreciation. Before you create any accounting entries, check the processing options to determine whether the system runs processes automatically or whether you must schedule processing.
- To create period depreciation accounting entries:
- Determine which periods are open to ensure that depreciation is expensed to the correct period.
- To verify periods, use the Establish Business Units component, and access the Asset Management Definition page. Click the Update Open Periods link to review open and closed periods on the Open Period Update page.
- If the open periods show that the current accounting period is open, you can create period depreciation accounting entries. If not, you must close the prior period manually and open the current period before creating period depreciation accounting entries.
- Account for any depreciation that is allowed for time during which an asset was not established in PeopleSoft Asset Management.
When you acquire assets (or place assets in service) during one accounting period but add them to PeopleSoft Asset Management during a different accounting period, you need to account for any depreciation that is allowed for the time during which the asset was not established in PeopleSoft Asset Management. You can do this by adjusting the transaction and accounting dates. Typically, the transaction date represents the date that you actually acquired the asset and the accounting date represents the date that you begin expensing depreciation. The accounting date is validated against the open periods for PeopleSoft Asset Management that are stored in the FIN_OPEN_PERIOD table to determine the period to which it is expensed. The difference between the transaction date and the accounting date determine whether any prior period depreciation needs to be calculated. For example, suppose that a computer was acquired and placed in service on March 15, 2005, but the information was not entered into PeopleSoft Asset Management until August 1, 2005. All periods prior to August are closed. PeopleSoft Asset Management automatically calculates depreciation starting in March, and it reflects this depreciation in the August period. When period depreciation accounting entries are created for August, they will reflect all depreciation activity since March.
Note: This is the only time life-to-date calculations take place without being selected.
Create accounting entries for the amount that you enter during the Add process for assets with accumulated depreciation.
When you add an asset with accumulated depreciation, you can create accounting entries for the amount that you enter during the Add process. When the asset has been added, accumulated depreciation is updated each time that you create new period depreciation accounting entries.
Set up the depreciation allocation calendar.
The amount of depreciation that you can expense for each period depends on how you set up your calendar. You can define the periods as months. When you set up your calendar, specify the year, the number of periods in each year, the beginning and ending date of each period, and the name of each period. For example, if you use a monthly calendar, the first period might be called January or April.
You also specify the portion of depreciation to be allocated for each period. For example, if you use a monthly calendar, you can specify that 1/12 of the annual depreciation amount is allocated to each period.
Close accounting periods.
When you have created accounting entries for depreciation for an accounting period, you must close it.