AS91 incorrectly computes legacy asset depreciation after a mid-year takeover. In the example below, it doubles depreciation for the takeover year with a planned depreciation for July 2014 of 7,000 instead of the expected 1,000. Posting of 7,000 in July will double depreciation because the takeover values already include 6,000 of accumulated depreciation for the months of January through June 20
Asset purchased 01/01/2013 for 120,000 USD
Useful life 10 years
Takeover date 06/30/2014
Book value of asset at takeover calculated as follows;
Acquisition cost 120,000
Depreciation for 12 months 2013 -12,000
Depreciation for 6 months 2014 -6,000
Net book value at 06/30/2014 102,000
The following configuration is in place
Transaction AS91 is used to create an asset with a capitalization date of 01/01/2013. My screen shots are not in the correct sequence but show that a useful life of 10 years was entered and an acquisition cost of 120,000 and accumulated ordinary depreciation of 18,000 as of 06/30/2014.
Why is the planned depreciation 7,000 rather than 1,000 for July, 2014. How do I correct it. Since 6,000 of accumulated depreciation was taken over from the legacy system, posting 7,000 will incorrectly double depreciation expense for the year.
Thanks,
Bob
