Depreciation calendar for 4/ 4/5 accounting period | IFS Community
Question

Depreciation calendar for 4/ 4/5 accounting period


Userlevel 2
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Our Accounting periods has been set to follow 4/4/5 calendar, the depreciation calendar also follows the same. When we created a depreciation proposal, we could see that depreciation is calculated using calendar month rather than the 4/4/5 period. 

How can we get the system to calculate depreciation using 4/4/5 calendar. ?

 


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13 replies

Userlevel 7
Badge +14

Can you please check how your depreciation calendar is setup?

 

You will have to create new one or modify the existing one according to your requirement. ( 4/4/5 calendar) Modification will not be allowed if you have already created proposals. 

 

P.S.

You can find the relevant calendar in tour FA Books.

 

Hope this helps.

 

Shehan Almeida.

Userlevel 7
Badge +15

Hi @abyamfo ,
I’m not quite sure how 445 calendar structure is defined in your organization ( What is the first date of period 1), hence I could not check in the latest IFS version. Therefore, even after setting up the above data ( Please consider on the checkbox of Default calendar in “Depreciation calendar” also ), if you observe the issue, I believe it is better to create case to IFS Support for deeper investigation.

Userlevel 2
Badge +2

Hello Almeida/Fernando,

 

Thank you for your prompt response. Please see our 445 calendar below, unfortunately when we run the depreciation proposal, the system only calculates in calendar months: Jus t so you know our accounting period calendar is the same as our depreciation calendar:

 

 

 

kindly help us to know how to get the system to calculate depreciation based on the 445 calendar highlighted above.

 

Thank you

Userlevel 7
Badge +12

Hi,
Do you mean depreciation based on number of days? 
How your depreciation method is currently defined?

Userlevel 2
Badge +2

Good morning Adam,

 

Yes please our depreciation calendar 4/4/5 is based on days. IFS is not calculating using the 4/4/5 calendar.

 

I hope you can help us on how to get round this.

 

Thank you

Userlevel 7
Badge +12

Please check depreciation method settings then. You should use „remaining value/remaining days” calculation.

Userlevel 7
Badge +15

Hello Almeida/Fernando,

 

Thank you for your prompt response. Please see our 445 calendar below, unfortunately when we run the depreciation proposal, the system only calculates in calendar months: Jus t so you know our accounting period calendar is the same as our depreciation calendar:

 

 

 

kindly help us to know how to get the system to calculate depreciation based on the 445 calendar highlighted above.

 

Thank you


hI @abyamfo ,

You are able to achieve this though setting up method type as RemValue/RemDays at Depreciation method ( Need to connect this to obejct in books too)


Then Depreciation value for first period will be as follows for 29 days (4 weeks )

My example , base value 36500 of asset with life time of one year , so daily depreciation would be 100 ( 36500/365) and for 29 days it is 29*100=2900
 


Here Accounting  calendar and Depreciation calendar used by me as follows;

 


and 

 


Hope this helps you.

 

Userlevel 2
Badge +2

Hello , thank you very much for the info above, we tried exactly what you suggested, but unfortunately it did not work correctly, mainly due to the fact that we calculate depreciation based on weeks, rather than days, consequently, June should be 30 days(6weeks x 5 Days), but when we use the RemValue/RemDays, the system calculates depreciation based on 42 days.

 

Kindly show us the best way to get this resolved.

 

Counting on your utmost assistance.

 

Thank you

 

Userlevel 7
Badge +12

Hi,

Rem Value/Rem Days is not counting working days only, but all calendar days, 42 days is 6 weeks x 7 days...

Can you explain in details (perhaps by example) what calculation do you expect? For asset with useful life say 3 years?

 

Userlevel 2
Badge +2

Hello Adam

 

Please see example below as requested:

The  acquisition values of a Motor Vehicle is £14500, Useful Life 3years. Depreciation calculation will be:

Annual depreciation =  14500/3 =  4833.3333

 

Weekly depreciation  =  4833.3333/52  = 92.9487  (we always use 52 weeks, even when there is 53 weeks in a year )

 

Depreciation for a 4  week period =  92.9487 x 4  =371.7948

 

Depreciation for a 5 week period will be = 92.9487 x 5 = 464.7435

 

And so on.

 

NB: Just so you know we do use 4 decimal places.

 

Userlevel 7
Badge +12

Hi,

As far as I can see, IFS does not support weekly depreciation as long as your Fixed Assets calendar is not set  to weekly one…

And there is no way to use 4 decimal places in amounts in IFS, I think.

You have two options then:

  1. Create Depreciation calendar with 52 periods in the year, linking 4 or 5 FA periods to single accounting period. Then you can use depreciation method “RemValue/RemPeriods”. (e.g. in your June 2021 you will have periods 26: 03/07/21-09/07/21, 27: 10/07-16/07, 28: 17/07-23/07 and 29: 24/07-30/07). Please note that you must define your calendar in advance long enough to cover full estimated life of all your assets. System will then calculate your depreciation for a period dividing asset net value by number of period remaining (and rounding it to two decimals). It is closest possible to depreciation method described in your example, but requires an effort in calendar definition.
  2. Switch to daily depreciation tested earlier. I think difference between daily and weekly calculation are not very significant. 
Userlevel 2
Badge +2

Good morning Adam,

Thank you for the email dated 19th of July 2021.

We have set up a 52 week calendar and tried to get IFS to pick that, but it already has a default calendar and we are unable to replace this. Please see below:

 

How can we set the new calendar as the default so it will override the monthly calendar.

 

Also if we want to use the customize in depreciation methods:

 

Kindly help with the above. Thank you

Userlevel 7
Badge +12

You do not need to set weekly calendar as default, I think. You can connect weekly calendar to depreciation book, if it is not default one, or remove all periods in existing calendar and replace them with weeks.

As per IFS help “Depreciation periods are the periods defined for the purpose of accounting for fixed assets objects. When IFS/Fixed Assets Accounting is installed, the default depreciation calendar will be created. The depreciation periods in the default calendar will be equal to the accounting periods in IFS/Accounting Rules. If the depreciation periods do not correspond with accounting periods, the information must be modified or supplemented.”

For weekly calculation, RemValue/RemPeriods method should be used. “Customized” method allow you to specify individual depreciation percentages for each period of asset useful life (right-click “Specified Depreciation Factor”).