Historical accumulated depreciation examples—Fixed Assets Management

If your company enters historical accumulated depreciation manually, Fixed Assets Management adjusts depreciation schedules to ensure the following:

  • The total of all historically posted periods equals the amount that you provided.

  • The total depreciation across all periods equals the asset’s depreciable cost.

To achieve this, Fixed Assets Management adjusts depreciation in the last historically posted period and the first non-historical period. If necessary, other periods are also adjusted.

The following examples show how different custom historical depreciation amounts affect the depreciation schedule.

Examples

All examples use the following scenario:

  • Go-live date: June 2nd, 2024

  • Asset cost: $1,100

  • Salvage value: $100

  • Depreciable cost: $1,000

  • In-service date: April 5th, 2024

  • Depreciation method: Straight-line

  • Useful life: 4 months

If your company is configured to calculate historical accumulated depreciation automatically, the schedule amounts are the same as a non-historical asset. The only difference is that periods with scheduled posting dates before the go-live date are considered historically posted.

The system calculates $500 for the total historical depreciation, which is allocated to periods 1 and 2.

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) State
1 April 30th, 2024 250.00 Historically posted
2 May 31st, 2024 250.00 Historically posted
3 June 30th, 2024 250.00 Not posted
4 July 31st, 2024 250.00 Not posted

The user-provided amount is $0. Periods 1 and 2 are reduced to zero, and period 3 is increased to compensate.

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) State
1 April 30th, 2024 0.00 Historically posted
2 May 31st, 2024 0.00 Historically posted
3 June 30th, 2024 750.00 Not posted
4 July 31st, 2024 250.00 Not posted

The user-provided amount ($50) is significantly less than the system-calculated amount ($500). Period 1 is reduced to zero, period 2 is also reduced, and period 3 is increased to compensate.

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) State
1 April 30th, 2024 0.00 Historically posted
2 May 31st, 2024 50.00 Historically posted
3 June 30th, 2024 700.00 Not posted
4 July 31st, 2024 250.00 Not posted

The user-provided amount ($400) is less than the system-calculated amount ($500). Period 2 is reduced and period 3 is increased to compensate.

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) State
1 April 30th, 2024 250.00 Historically posted
2 May 31st, 2024 150.00 Historically posted
3 June 30th, 2024 350.00 Not posted
4 July 31st, 2024 250.00 Not posted

The user-provided amount ($600) is more than the system-calculated amount ($500). Period 2 is increased and period 3 is reduced to compensate.

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) State
1 April 30th, 2024 250.00 Historically posted
2 May 31st, 2024 350.00 Historically posted
3 June 30th, 2024 150.00 Not posted
4 July 31st, 2024 250.00 Not posted

The user-provided amount ($800) is significantly more than the system-calculated amount ($500). Period 2 is increased, period 3 is reduced to zero, and period 4 is also reduced to compensate.

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) State
1 April 30th, 2024 250.00 Historically posted
2 May 31st, 2024 550.00 Historically posted
3 June 30th, 2024 0.00 Not posted
4 July 31st, 2024 200.00 Not posted

The user-provided amount ($1,000) equals the asset’s depreciable cost. Period 2 is increased. Since depreciation is fully accounted for before the go-live date, the remaining periods are set to zero to compensate.

Depreciation schedule Depreciation schedule
Period Scheduled posting date Depreciation amount ($) State
1 April 30th, 2024 250.00 Historically posted
2 May 31st, 2024 750.00 Historically posted
3 June 30th, 2024 0.00 Not posted
4 July 31st, 2024 0.00 Not posted

The user-provided amount ($1,100) exceeds the asset’s depreciable cost ($1,000), so Fixed Assets Management prevents this scenario. Historical accumulated depreciation must be less than or equal to the depreciable cost.