Using Fixed Asset Modules in Dynamics GP – Straight Line Depreciation
You can use Fixed Asset modules, to set up, enter, and maintain asset records. When necessary, you can add insurance and user-defined information. Above all, you can also create additional records for each asset. In addition, this might include the investment tax credit information and lease information.
Similarly, you also can use Fixed Asset modules to complete the following tasks:
- Calculate depreciation.
- Import information to Fixed Asset modules from other sources.
- Create and use asset groups to make maintaining asset records easier.
- Transfer an asset to a new general ledger account or property tax location.
- Retire an asset, partially retire an asset, or retire a group of assets.
If you’re using General Ledger, you can track General Ledger information entered in Fixed Asset modules. In other words, details such as additions, transfers, depreciation, the retirement of assets, and other changes.
If you’re using Payables Management, you can track assets that originate in those modules. This can also be done in Purchase Order Processing. For instance, you can even add them as fixed assets.
Fixed Asset Depreciation Formula
The following formula is used in Microsoft Dynamics GP for depreciating Fixed Assets. In addition, the method used is the straight-line method for depreciation.
Formula: (Cost – Salvage Value – (LTD Depreciation Amount – YTD Depreciation Amount)) ÷ Remaining Life in Days.
Where:
Cost = Cost of Asset.
Salvage Value = Estimated realizable value of an asset at the end of its life.
LTD Depreciation = Life to date depreciation.
YTD Depreciation = Year to date depreciation.
In conclusion, GP determines the daily depreciation rate using this. After that, it is multiplied by the number of days in a year.
However, suppose you take the Average method as “None”. Dynamics GP will calculate depreciation as follows:
For example:
Asset Cost: $ 200,000
Asset Life: 10 years
Depreciation:
Daily Depreciation = 200,000/(360*10) = $ 55.55
Monthly Deprecation = 200,000/((360*10))*30 = $ 1,666.67
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