FA Depreciation Calculation

Article
06/22/2022

FA Depreciation Calculation with FA Block and Additional Depreciation

FA Block

Depreciation is allowed on block of assets. Block of assets is a group of assets falling within a class of assets. For Example :

Tangible assets, being building, machinery, plant or furniture,
Intangible assets, being know how, patents, copyrights, trade-marks, licenses, franchises or any other business or commercial rights of similar nature

Additional Depreciation

In case of any new machinery or plant acquired and installed after March 31, 2005 by an assessee who is engaged in the business of manufacturing or production of any article or thing - additional depreciation under Income Tax Act of 20% of actual cost shall be allowed. Where the asset is used for less than 180 days then 50% depreciation i.e, 1/2 of 20% (i.e. 10%) is available (Balance 50% of Additional Depreciation can be claimed in next year)

To calculate depreciation with FA Block and Additional Depreciation

Go to relevant Fixed Asset and Add. Depr. Applicable field should be marked true on General Tab.
Select the relevant FA Block Code on Posting Tab of Fixed Asset card, Add. Depreciation % should have a value on the selected block code.
Select Depreciation Book as Income Tax on Depreciation Book of Fixed Asset Card.
Run the Calculate Depreciation batch job, fill the necessary fields and click ok to calculate depreciation.
The batch job calculates the depreciation and creates lines in the fixed asset journal.
Choose the Post action.

FA Depreciation Calculation with Multiple Shifts

Shift depreciation is used when manufacturing companies have multiple production shifts for parts of the year. For example, a company can have one, two, or three shifts during high production season but only one shift during the rest of the year. This means that some fixed assets are used more often than normal during the high production season and they would experience greater depreciation during that time. Being able to adjust the fixed asset's depreciation rates higher makes sense if the fixed asset is active for more than one shift. User can adjust the depreciation using calculated depreciation that is unique to each shift.

To calculate depreciation with multiple shifts

Go to relevant Fixed Asset, select Depreciation Book as Company on Depreciation Book of Fixed Asset Card.

Go to Related Information -> Fixed Asset Shift, fill in the fields as described in the following table.

Field	Description
Depreciation Book Code	Specifies the depreciation book.
FA Posting Group	Specifies the fixed asset posting group.
Depreciation Starting Date	Specifies the starting date of depreciation.
Depreciation Ending Date	Specifies the ending date of depreciation.
No. of Depreciation Years	Specifies the no. of years of depreciation.
Depreciation Method	Specifies the depreciation calculation method.
Straight Line %	Specifies the the Straight Line % if the depreciation method is selected as straight line.
Declining-Balance %	Specifies the the Declining-Balance % if the depreciation method is selected as straight line.
Shift Type	Specifies the shift type, for example Single, Double, Triple.
Industry Type	Specifies the industry type, for example Normal, Seasonal, Non-Seasonal.
Used No. of Days	Specifies the used number of days.

Run the Calculate Depreciation batch job, fill the necessary fields and click ok to calculate depreciation.
The batch job calculates the depreciation and creates lines in the fixed asset G/L journal.
Choose the Post action.

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