Steps to Process Depreciation The Process Depreciation option calculates the current year depreciation for the applicable assets in Fixed Asset Inventory. Fixed Asset Inventory is set up to calculate depreciation one time per year for an asset using the straight-line method. To calculate depreciation with the straight-line method, the salvage value of the asset is subtracted from the total cost and then divided by the number of years of useful life. When applicable, the Process Depreciation option calculates the first year's depreciation for the assets according to the First Year Depreciation Type specified for each asset.
With the Process Depreciation option, all assets that are set up to depreciate with a useful life greater than zero, where the total cost less the salvage value less the accumulated depreciation is greater than zero, and with the current year depreciation not yet calculated (by using the Process Depreciation option for the current year), will automatically be included in the batch. For each asset in the batch, the amount to be depreciated and the General Ledger entries (if applicable) will display.
Once the depreciation is processed, the asset records in the Asset File Maintenance option are updated to reflect the new depreciation information (the Book Value, Depreciation, and Depreciation Accumulated fields are updated), and the necessary entries post to General Ledger (from the Fixed Asset journal) to record the depreciation, if applicable.