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Posted depreciation in current financial period is reversed when a fixed asset is disposed

  • June 19, 2025
  • 5 replies
  • 96 views
J
Freshman II

We’re in the process of setting up our Fixed Assets in Acumatica. When we dispose of an asset, Acumatica posts a debit to our depreciation expense equal to all of the depreciation posted in the current fiscal year and calculates the gain as Proceeds less NBV at the start of the Fiscal year. 

We’ve set our depreciation method to New Zealand Diminishing Value Evenly by Periods. I wasn’t able to find anything in the literature for that method that would indicate a full reversal of current year depreciation on disposal.

I’ve also tested the following scenarios without any change in results:

  Page Field Value
Scenario 1 FA Preferences Depreciate in Disposal Period FALSE
  Dispose Assets Before Disposal Depreciate
Scenario 2 FA Preferences Depreciate in Disposal Period FALSE
  Dispose Assets Before Disposal Suspend
Scenario 3 FA Preferences Depreciate in Disposal Period TRUE
  Dispose Assets Before Disposal Depreciate
Scenario 4 FA Preferences Depreciate in Disposal Period TRUE
  Dispose Assets Before Disposal Suspend

 

Is there another setting somewhere that I’m missing? 

 

Jeremy

Best answer by jknoke70

By reviewing the code, our team discovered that the New Zealand Declining Balance depreciation method is designed to reverse depreciation in the year of disposal. Unfortunately this isn’t documented in the description of the depreciation method, which would have been very useful. We chose the New Zealand Declining Balance method because it was the closest match to how we calculate declining balance depreciation in Canada, with the exception of the depreciation reversal on disposal. The other declining balance methods require DB multipliers to be calculated which is an unnecessary step for basic declining balance depreciation (at least for how we generally depreciate assets in Canada). By changing the depreciation method the issue was resolved. 

N

5 replies

J
Freshman II
  • jknoke70
  • Author
  • Freshman II
  • June 24, 2025

Correction on my original post: The system posts a CREDIT to depreciation expense and a debit to accumulated depreciation, not the other way around as I originally posted.  

J
Jr Varsity I
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  • JohnMichels
  • Jr Varsity I
  • June 30, 2025

​@jknoke70  Check the Averaging Convention on the FA Class record.  This will determine how the FA is depreciated in the year of acquisition and disposal.   From this behavior, Full Year is likely selected for the FA Class record in your case.  No depreciation expense is recorded in the year of disposal with Averaging Convention = Full year.  Hence, the credit to the full year to date depreciation expense on disposal. 

Take a look at help: Averaging Conventions

Chris Hackett
J
Freshman II
  • jknoke70
  • Author
  • Freshman II
  • July 7, 2025

​@jknoke70  Check the Averaging Convention on the FA Class record.  This will determine how the FA is depreciated in the year of acquisition and disposal.   From this behavior, Full Year is likely selected for the FA Class record in your case.  No depreciation expense is recorded in the year of disposal with Averaging Convention = Full year.  Hence, the credit to the full year to date depreciation expense on disposal. 

Take a look at help: Averaging Conventions

Thanks for this ​@JohnMichels, however the averaging convention for our depreciation method is Full Period, not Full Year. 

Chris Hackett
J
Freshman II
  • jknoke70
  • Author
  • Freshman II
  • Answer
  • July 11, 2025

By reviewing the code, our team discovered that the New Zealand Declining Balance depreciation method is designed to reverse depreciation in the year of disposal. Unfortunately this isn’t documented in the description of the depreciation method, which would have been very useful. We chose the New Zealand Declining Balance method because it was the closest match to how we calculate declining balance depreciation in Canada, with the exception of the depreciation reversal on disposal. The other declining balance methods require DB multipliers to be calculated which is an unnecessary step for basic declining balance depreciation (at least for how we generally depreciate assets in Canada). By changing the depreciation method the issue was resolved. 

Chris Hackett
Chris Hackett
Community Manager
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  • Chris Hackett
  • Acumatica Community Manager
  • July 11, 2025

Thank you for sharing your solution with the community ​@jknoke70!

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