Depreciation changes after disposal

Description

Depreciation changes after disposal
Current accumulated depreciation changes after an asset is disposed
Current year to date depreciation changes after an asset is disposed
ADS method increases depreciation upon disposal
Half-year convention on disposal.
Disposal in the same year
Disposing in the same year

Cause

A disposal is a calculation of depreciation. The Disposal calculation is based on the based on the convention built into the Depreciation method. When disposing an asset using a depreciation method with a Half-year convention prior to the end of the asset’s life, the program will calculate half of the year’s depreciation for that asset. The Current Thru date on the asset at the time the disposal is entered has no effect on the disposal calculation.

AT,MF, MT, MA, AD, SH, and DH have a half year convention in the year of disposal. On disposal, the Program will calculate half the year’s depreciation for assets regardless of what was calculated prior to the disposal was entered.

When the asset is in the last year of it’s life, Due to tax laws it will only take a half of that year full disposal calculation.

It is recommended to accept these figures.

Resolution

To force the depreciation into the asset prior to the disposal in Sage Fixed Assets:

Undo the Disposal: From the Detail Asset view, go to: Asset menu, select Delete Last Transaction, click Ok, click Save.
Run Depreciation on the asset to the month prior to the Disposal, change the Depreciation Method to No Depreciation (NO) answer the Yes, select Current Thru Date, click OK.
Ensure the Beginning Date is the Month prior to the Disposal, enter the Disposal information.