Set Up FA Depreciation

You can use various methods of depreciation for preparing financial statements and income tax returns. Many large corporations use straight-line depreciation in their financial statements because this generally permits reporting higher earnings. For income tax purposes, however, many businesses use an accelerated depreciation method. For more information, see Depreciation Methods.

When you have created the relevant depreciation books, you must assign one or more depreciation books to each fixed asset. A depreciation book that is assigned to a fixed asset is referred to as a fixed asset depreciation book. Accordingly, the window for assigned depreciation books is called FA Depreciation Books.

To create a depreciation book

In a fixed asset depreciation book, you specify how fixed assets are depreciated. To accommodate various methods of depreciation, you can set up multiple depreciation books.

  1. Choose the Search for Page or Report icon, enter Depreciation Books, and then choose the related link.
  2. In the Depreciation Books List window, choose the New action.

  3. In the Depreciation Book Card window, fill in the fields as necessary. Choose a field to read a short description of the field or link to more information.

    NOTE

    You can record fixed asset transactions in the Fixed Asset G/L Journal window or in the Fixed Asset Journal window, depending on whether the transactions are for financial reporting or for internal management. Follow the next step to define which type of journal is used for the different fixed asset activities by default.

  4. On the Integration FastTab, select the check box for each fixed asset activity whose transactions you want to post using the Fixed Asset G/L Journal window.
  5. Repeat steps 2 through 4 for each depreciation method or posting method that you want to assign to fixed assets as a depreciation book.

To assign a depreciation book to a fixed asset

  1. Choose the Search for Page or Report icon, enter Fixed Assets, and then choose the related link.
  2. Select the fixed asset that you want to set up a fixed asset depreciation book for.
  3. On the Depreciation Book FastTab, fill in the fields as necessary.
  4. If you need to assign more than one depreciation book to the fixed asset, choose the Add More Depreciation Books action.

  5. Alternatively, choose the Depreciation Books action to specify one or more fixed asset depreciation books.

    NOTE

    When you use the manual depreciation method, you must enter depreciation manually in the fixed asset G/L journal. The Calculate Depreciation function omits fixed assets that use the manual depreciation method. You can use this method for assets that are not subject to depreciation, such as land.

To assign a depreciation book to multiple fixed assets with a batch job

If you want to assign a depreciation book to several fixed assets, you can use the Create FA Depreciation Books batch job to create fixed asset depreciation books.

  1. Choose the Search for Page or Report icon, enter Fixed Assets, and then choose the related link.
  2. Select the fixed asset that you want to set up a assign a depreciation book to, and then choose the Edit action.
  3. In the Depreciation Book Card window, choose the Create FA Depreciation Books action.
  4. In the Create FA Depreciation Books window, fill in the Depreciation Book field.

  5. Choose the Copy from FA No. field, and then select the fixed asset number that you want to use as the basis for creating new fixed asset depreciation books.

    If you fill in this field, the depreciation fields in the new fixed asset depreciation books will contain the same information as the corresponding fields in the fixed asset depreciation book that you copy from. Leave the field blank if you want to create new fixed asset depreciation books with empty depreciation fields.

  6. On the Fixed Asset FastTab, you can set a filter to select the assets that you want to create the fixed asset depreciation books for.
  7. Choose the OK button.

To set up depreciation posting types

For each depreciation book, you must set up how you want Dynamics NAV to handle various posting types. For example, whether posting should be debit or credit and whether the posting type should be included in the depreciable basis.

  1. Choose the Search for Page or Report icon, enter Depreciation Books, and then choose the related link.
  2. Select the depreciation book that you want to set up, and them choose the FA Posting Type Setup action.

  3. In the FA Posting Type Setup window, fill in the fields as necessary.

    NOTE

    You cannot insert or delete lines in the FA Posting Type Setup window. You can only modify the existing lines.

    We recommend that you do not change the setup for depreciation books for entries that have already been posted. Changes will not affect the entries that are already posted, which would make depreciation book statistics misleading.

To set up default templates and batches for fixed asset depreciation

For each depreciation book, you define a default setup of templates and batches. You use these defaults to duplicate lines from one journal to another, create journal lines using the Calculate Depreciation or Index Fixed Assets batch jobs, duplicate acquisition costs in the insurance journal.

  1. Choose the Search for Page or Report icon, enter Depreciation Books, and then choose the related link.
  2. Select the depreciation book that you want to define default journals for, and then choose the FA Journal Setup action.
  3. If you want to have a default setup for each user, choose the User ID field to select from the Users window.
  4. In the other fields, select the journal template or journal batch that must be used by default.

See Also

Setting Up Fixed Assets
Fixed Assets
Finance
Welcome to Microsoft Dynamics NAV
Working with Dynamics NAV


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