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Reply from Ron Roberts on Oct 23 at 1:52 PM Depreciation is posted against the asset cost, not against individual posting lines. I need to understand what you mean first to be able to offer ideas. Where do you see depreciation individually against the three postings?
| | | ---------------Original Message---------------
From: EagerLearner
Sent: Tuesday, October 21, 2014 4:52 PM
Subject: How to Post a "Fixed Asset Accrual" such that it begins Depreciating in the Right Period?
I have an asset which we purchased in Period 1, but the invoice has not yet been received. Our organization only posts amounts to A/P when we have the actual invoice - when the invoices our outstanding, we post a debit to the relevant account and a credit to our accruals.
For this asset, we've therefore posted an accrual, which will automatically (and correctly) reverse in the next period so that when the actual invoice comes in, all balances are correct.
On the asset side, I'd like depreciation to start in Period 1, because that is when the asset was in use. My issue is that when the accrual reverses, a credit is posted to assets in Period 2 and when the invoice comes in, a debit is posted in Period 2 - both of which also start depreciating.
Now I have a debit which began depreciating in Period 1, and an offsetting debit and credit which began depreciating starting in Period 2. The net effect is the correct depreciation is being calculated, but I have it over 3 asset lines. Is there a "cleaner" or more efficient way to do this? |
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