Depreciation profiles in Ax 2012

Depreciation profiles in Ax are used as a set of rules that govern the depreciation principles to be applied on the fixed assets. These profiles are generally used for tangible assets however, if required the depreciation profile can be used for intangible assets as well.

Ax supports the following depreciation methods:

1. Straight line Service life (SLM)

2. Reducing Balance

3. Manual

4. Factor

5. Consumption

6. Straight line life remaining

7. 200% reducing balance

8. 175% reducing balance

9. 150% reducing balance

10. 125% reducing balance

The use of the depreciation methods are generally governed by the requirements placed by the local laws. Generally the companies use the Straight line service life, Reducing balance or manual methods of depreciation.

Setup Depreciation profile

1. Fixed Assets –> Setup –> Depreciation –> Depreciation Profile

2. Click New to create a new depreciation profile

3. Select the depreciation method in the Method field; based on the method selected the system enables/disables different fields to be used.

Below table shows the combination of the method & the fields that are enabled/disabled by the system.

Depreciation Method/Field Visibility	Percentage	Depreciation Year	Period Frequency	Full depreciation	Factor	Interval
Straight line service life	No	Yes	Yes	No	No	No
Reducing Balance	Yes	Yes	Yes	Yes	No	No
Manual	No	No	No	Yes	No	No
Factor	No	No	No	No	Yes	Yes
Consumption	No	No	No	No	No	No
Straight line Remaining life	No	Yes	Yes	No	No	No
200% Reducing balance	No	Yes	Yes	Yes	No	No
175% Reducing	No	Yes	Yes	Yes	No	No
150% Reducing	No	Yes	Yes	Yes	No	No
125% Reducing	No	Yes	Yes	Yes	No	No

 

Percentage: Use this field to define the percentage to calculate the depreciation. The system calculates the depreciation by calculating value as % * Net Book Value of the asset.

Depreciation Year: Determines the depreciation year; Calendar or Fiscal.

When selected Calendar then the system considers the Calendar year starting from Jan. 1st

When selected Fiscal then the system considers the fiscal year setup

 

Period Frequency: Determines the accrual of the depreciation amounts. Following options are available depending on the depreciation year selected.

In case Calendar year is selected then:

Yearly

Monthly

Quarterly

Half-Yearly

In case Fiscal year is selected then:

         Yearly

         Fiscal Period

 

Full Depreciation: This field allows using the Net book value of the asset based on service life in the last period to calculate depreciation.

 

Factor: Derives value from the Percentage field on the overview tab.

 

Interval: Field determines how frequently the depreciation will be charged:

         Monthly

Quarterly

         Half-Yearly

Yearly