Running the Depreciation Rule for Fixed Assets

Some Of the nominals and ledgers used in this topic may be different to those in your chart of accounts.

Month End Process

This topic explains how to run the depreciation rule in IRIS Financials to automatically post depreciation.

The depreciation rule uses the information stored in the Analysis Fields tab of both the asset type and individual asset accounts, together with applicable key lists to calculate the depreciation to date.

If an asset has over depreciated due to a change in the useful life or the cost of the asset, the rule posts the adjustment automatically bringing the depreciation back in line.

The following formula is used to calculate depreciation:

Calculated Depreciation = (Asset Account at Cost Journal/Useful life of the asset type) * number of periods to depreciate.

The system checks the current accumulated depreciation that has been posted on the asset account, then subtracts this from the result of the Calculated Depreciation formula above.

Running the Depreciation Rule

Before running the rule, you need to check and if necessary, update accounts for fixed assets with the FA Asset Category to set where the depreciation posts to.

  1. Select Maintenance, then select Keylists from the menu.
  2. Select the required account.
  3. Select Analysis Fields, then EDIT.
  4. In In FA Asset Category, select the required option. Select SAVE to save the depreciation settings.
  5. To run the depreciation rule using these settings, select Rules, then select Depreciation (Global) from the menu.
  6. The Run Rule dialog is displayed. Select Yes to confirm that you want to run the rule.
  7. The depreciation rule is scheduled to run as soon as possible.

Any required depreciation is posted into the system using the depreciation journal document type (DEPN), creating a single document per location.

You can check the results of the depreciation rule by running a document enquiry on depreciation journals (DEPN).

Running the enquiry shows any depreciation journal documents that meet the specified criteria.

The depreciation rule calculates depreciation up to the period specified in FA Useful Life on the account.

The system does not duplicate any depreciation data and therefore if the rule is not run for several months, the deprecation for the missed months is correctly calculated, although only the total amount is posted into the period specified in FA Useful Life on the account, not individual amounts into individually missed periods.