About reversing posted depreciation—Fixed Assets Management

If reversals are enabled in Fixed Assets Management, you can reverse posted depreciation to correct mistakes.

Reversing a depreciation entry does the following:

  • Creates a reversal journal entry to offset the original depreciation expense.

  • Changes the period state from Posted to Reversed. The period can be reposted when ready.

  • Restores the Total accumulated depreciation and Remaining depreciation for the schedule to their values before the entry was posted.

You can reverse in bulk from the Post Depreciation list, or individually from an asset's Depreciation Schedule page. Within a schedule, entries must be reversed in order of most recent to oldest actual posting date, without skipping any entries in between.

Assets cannot be deleted if any of their depreciation entries have been reversed.

Setup

Before you can reverse a depreciation entry, reversals must be turned on in Fixed Assets Management configuration.

Learn how to turn on reversals.

Journal entries for reversing depreciation

When a depreciation entry is reversed, Sage Intacct creates a journal entry that debits the Accumulated depreciation GL account and credits the Depreciation expense GL account, zeroing out the original posting.

The journal entry also contains the following information:

  • Description: "Reverse depreciation expense: ID--Name", where ID--Name are replaced with the ID and name of the asset

  • Dimensions: All dimensions copied over from the asset

  • Memo: The Description field of the asset

Example

GL account Debit ($) Credit ($)
Accumulated depreciation 500.00  
Depreciation expense   500.00

Viewing journal entries

To view journal entries related to a depreciation period, select the Journal entries link on any of the following pages:

  • Depreciation Schedule

  • Post Depreciation

  • Bulk Action Run

The link opens a list of all related journal entries, including depreciation expense and reversal entries. Select a transaction number to view the details of a specific journal entry. Select a Base debit or Base credit amount within the journal entry to view the depreciation entries associated with that amount. If the journal entry is a summary, there will be more than one associated depreciation entry.

What's the Historically reversed depreciation entry state?

When you reverse posted depreciation, Fixed Assets Management keeps a full record of all depreciation activity for the period. To do this, the system retains some depreciation entries for reference only. These reference‑only entries have a state of Historically reversed. You might see them in custom reports or when drilling down from a journal entry in the General Ledger.

Example

The following example shows how historically reversed depreciation entries are created when depreciation is reversed and reposted for the same period.

  1. A depreciation entry is scheduled for period 1:

    Depreciation schedule
    Period Depreciation entry ID Depreciation amount ($) State
    1 15 4,000.00 Not posted

  2. The depreciation entry is posted on January 30. The state changes to Posted:

    Depreciation schedule
    Period Depreciation entry ID Depreciation amount ($) State
    1 15 4,000.00 Posted

    A depreciation expense journal entry is created with a posting date of January 30.

    GL account Debit ($) Credit ($)
    Depreciation expense 500.00  
    Accumulated depreciation   500.00

  3. The depreciation entry is reversed on February 1 because the posting date was incorrect.

    A reverse depreciation expense journal entry is created with a posting date of February 1.

    GL account Debit ($) Credit ($)
    Accumulated depreciation 500.00  
    Depreciation expense   500.00

    The state of the original depreciation entry changes from Posted to Historically reversed. Two new depreciation entries are also created: one that offsets the original amount, and one in the Reversed state that can be reposted. Only the Reversed depreciation entry appears in the depreciation schedule.

    Depreciation schedule
    Period Depreciation entry ID Depreciation amount ($) State
    1 15 4,000.00 Historically reversed
    1 16 -4,000.00 Historically reversed
    1 17 4,000.00 Reversed

  4. Period 1 is reposted with the correct date of January 31. The state of the Reversed entry changes to Posted.

    Depreciation schedule
    Period Depreciation entry ID Depreciation amount ($) State
    1 15 4,000.00 Historically reversed
    1 16 -4,000.00 Historically reversed
    1 17 4,000.00 Posted

  5. If the period is reversed again, additional reference entries are created and retained:

    Depreciation schedule
    Period Depreciation entry ID Depreciation amount ($) State
    1 15 4,000.00 Historically reversed
    1 16 -4,000.00 Historically reversed
    1 17 4,000.00 Historically reversed
    1 18 -4,000.00 Historically reversed
    1 19 4,000.00 Reversed