Fixed asset depreciation calculation
When fixed assets are used and consumed, the process of incurring a cost is referred to as depreciation. This cost shows the wear and tear of a fixed asset and its real value. Depreciation is calculated from the first day of the month following the month in which the fixed asset was put to its intended use.
Below is an example of how fixed asset depreciation is calculated in PANTHEON.
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CASE SUMMARY
The depreciation calculation shows the cost of consuming work means. Anne Accountant, Tecta's person responsible, will calculated the depreciation of fixed assets for the period 2022-03. This is done as follows:
- Selecting the type of depreciation calculation document
- Creating a depreciation calculation
- Confirming the depreciation calculation
- Posting the depreciation calculation
- Creating a depreciation calculation report
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1. Selecting the type of depreciation calculation document
The person responsible defines the type of depreciation document in the Document types register for depreciation calculation.
In this case, the document type AR00 - Depreciation/indexation of fixed assets is selected.
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WARNING
When depreciation is calculated, confirmed and posted, up to three different types of depreciation calculations are recorded and posted in the register:
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2. Creating a depreciation calculation
To create a depreciation calculation, the person responsible opens the menu Financials | Fixed assets | Depreciation calculation.
From the document list, the previously created document type AR00 - Depreciation/indexation of fixed assets is selected.
This opens a window showing an overview of previous calculations, as shown in the image below.
The responsible person selects position 22-AR00-000001 for the 2022-03 period.
The document is selected by clicking the line.
The person responsible clicks the button Calculation on the bottom right to start the calculation.
A window showing the question Do you really want to recalculate depreciation? is displayed, asking for confirmation.
The responsible person clicks Confirm.
Once completethe calculation is complete, the program displays a notification: Depreciation calculation complete!
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WARNING
If any errors occur in the calculation, the calculation is still carried out, however, only using the available data, which may not be correct.
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3. Confirming the depreciation calculation
The calculation has been completed, however, the data has not yet been recorded in the Fixed assets register.
The person responsible must confirm the calculation.
The person responsible clicks the line 22-AR00-000001 and click the button Confirm to confirm the calculation.
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HINT
The depreciated value of fixed assets is entered into the tab Value in the Fixed assets register.
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The image below shows how the depreciation record for a desired asset is displayed in the Fixed assets register.
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HINT
By right-clicking on any column name and selecting the option Edit | Select columns, you can add columns to the displayed table, e.g. number of depreciation days, book values, etc.
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4. Posting the depreciation calculation
The posting is carried out by the person responsible when the calculation is completed and confirmed on the document type AR00 - Depreciation/indexation of fixed assets.
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HINT
The posting data is entered into the general ledger according to the pre-defined accounts from the Fixed assets register.
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The person responsible selects the line 22-AR00-000001.
The person responsible clicks the button Posting on the bottom right, which opens the window Posting of fixed asset depreciation.
A new journal entry is created for the post or the post is appended to an existing one.
In this case, the person responsible wants to create a new journal entry, which is why the checkbox Create is checked.
In the section Posting method, the person responsible then checks the checkbox Summary, which means that posting is carried out by account and potential cost center.
By selecting the option Detail, it is possible to post by individual fixed asset.
In the field Document type, the document type is selected, which will be used to create the journal entry for posting.
The Target date is automatically filled with the date of the calculation confirmation. The date can be manually changed by the person responsible before posting.
By default, the program sets the Posting date to the current date, in this case 5.5.2022.
In the next step, the person responsible launches posting by clicking the button Posting.
If posting was successful, the program displays the journal entry prepared, as shown in the image below.
5. Creating a depreciation calculation report
Next, the person responsible wants to create a depreciation calculation report. The data on calculated depreciation can be displayed by individual calculation number or in total for all calculations.
In the toolbar of the document AR00 - Depreciation/indexation of fixed assets, the person responsible clicks the button 
(Reports) to display calculation values.
This opens the window Depreciation reports, where different display criteria can be selected.
In the fields Depreciation from/to, the person responsible selects the calculation document to be displayed, in this case 22-AR00-000001.
From the list of report types, the report type 26H - Depreciation - detailed by inventory numbers is selected and the report is displayed as shown in the image below.
The report shows the value before depreciation, the changes and the final value after depreciation of fixed assets.
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HINT
The same procedure is used for depreciation calculation of small tools. However, it is first necessary to set the document type in the Document types register for small tools.
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