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Calculate Depreciation

Before you calculate the depreciation on assets, you should make sure that all the registered assets have had their Book values, Depreciation rate, Salvage value and other asset details entered at Accounts/Assets/Asset Register/Postings. In this way Loan performer will be able to calculate the period's depreciation in accordance with the set parameters.

Note:

LPF computes depreciation based on complete months with depreciation usually starting at the end of the month. Therefore for assets acquired in the middle of the month yet depreciation has to be computed for that period too, you will have to stretch the date of purchase to a period back.

It is advisable to compute depreciation regularly like monthly, quarterly, semi annually or annually.

How to Calculate Depreciation.

To calculate depreciation you go to Accounts/Assets/Calculate Depreciation on Assets and a screen like the one below shows up:

• Branch Code: From the drop down select the branch that you want to calculate the asset depreciation for or you can tick the Check for all checkbox to include all branches.  
• Cost Centre: From the drop down select the cost centre for which you want to calculate the asset depreciation or you can tick the Check for all checkbox to include all cost centres.
• End Depreciation: This should be the date on which you would like the depreciation calculations to stop and a report to be generated for that period of time, e.g., "02/05/2019".
• Reverse depreciation: Click this button to reverse the depreciation calculated for the past one month. The system will prompt the user if he wants to proceed with the reversal.

• Recalculate depreciation: Click this button to calculate depreciation for the past one month. The system will prompt the user if he wants to proceed with the recalculation.

Note that when you enter the End Depreciation date, e.g., "02/05/2019", then the scroll space will automatically be populated with the assets whose depreciation falls within this period. Under the column header "Depreciate" tick the assets that you want to include in the depreciation calculation.

Select any other required additional options or use the default selections. For additional information on these options you can refer to Accounting Report Formats.

Click on the Ok button to view the depreciation report which will look similar to the following:

Print the report to save and post the depreciation on assets to the various accounts.

Note that the depreciation on assets will not be posted to the relevant GL accounts unless you print this report. You can view the report on the depreciation for a period at Depreciation Report.

Related Topics

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