About depreciation rules—Fixed Assets Management

Depreciation rules define how an asset depreciates over time. Each rule includes a depreciation method, convention, and useful life. When a depreciable asset is placed in service, Fixed Assets Management uses the depreciation rules, along with other asset details, to generate depreciation schedules for the asset. Each depreciation rule creates a separate depreciation schedule.

Where depreciation rules are defined and when

Depreciation rules are defined in two places:

• On asset classifications: These serve as default rules for all assets in the classification.

• On individual assets: You customize depreciation rules directly on an asset when it's in the Ready for review state. These are the rules used to generate depreciation schedules.

You can add multiple depreciation rules to a single asset classification or asset, as long as each rule uses a different book (and therefore a different journal posting rule).

A depreciable asset that's in service must have at least one depreciation rule. Non-depreciable assets cannot have any depreciation rules.

How classifications rules affect assets

Depreciation rules on asset classifications provide a standard for how assets in the classification are treated. When you assign an asset to a classification, the classification's depreciation rules are copied over to the asset. This saves time during asset creation so you do not have to set up rules individually for each asset. However, you do not need to use the default classification rules. You can modify the depreciation rules on individual assets as needed. Changes made to an asset’s rules only apply to that asset and do not affect the classification or other assets in that classification.