Depreciation Years

Understanding your depreciation years is important to ensure accurate asset depreciation. When you create your Depreciation Year in Configuration, you define the time frame for the accounting cycle and the number of periods that make up the cycle for the life of the asset. Each depreciation year can be whatever you want; they do not have to follow the fiscal or calendar year. Without a depreciation year, FA doesn't know how to spread out the asset cost and depreciation will not calculate.

It is integral to plan out how you want to depreciate an asset and create the depreciation year accordingly. For example, if you create your depreciation year to match the calendar year, but you want your depreciation to follow your fiscal year it will not. Your depreciation will calculate incorrectly causing incorrect reporting.

Another reason to plan out your asset depreciation is once you start creating asset transactions within a depreciation year, the year can no longer be edited. For example, if there is an asset transaction in 2009, but not in any other year, the 2009 depreciation year can no longer be edited.

I hope this helps you understand your depreciation years!