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In Acumatica, implementing a change in asset life from 36 to 60 months with depreciation recalculated based on the Net Book Value (NBV) rather than the original cost requires a strategic approach to ensure accurate financial reporting.  The process starts by updating the useful life in the relevant asset class, which can be done under Fixed Assets > Configuration > Asset Classes, setting the new life to 60 months. However, since Acumatica typically calculates depreciation based on original cost, adjusting existing assets to reflect NBV-based depreciation involves manually modifying each asset's depreciation method—typically to Straight-Line or Manual—to enable custom depreciation entries. You would then calculate the remaining useful life at year-end (e.g., 55 months if 5 months have already been depreciated) and apply the formula for the new monthly depreciation: dividing the NBV at year-end by the remaining life (e.g., New Depreciation=86,111.1155\text{New Depreciation} = \frac{86,111.11}{55}New Depreciation=5586,111.11​, yielding a monthly depreciation of 1,565.66). This new monthly amount must be manually entered on each asset record. Once updated, you should run depreciation schedules to ensure the calculations reflect the revised asset life and NBV correctly. While this process is detailed, leveraging Acumatica’s import scenarios and mass update functionality can streamline adjustments if many assets are involved. It’s essential to verify the new setup in a sandbox environment first, as NBV-based depreciation changes can impact financial reports. Close coordination with your finance team is critical to ensure these adjustments meet both internal and external reporting standards.

To implement manual depreciation based on the Net Book Value (NBV) and remaining life in Acumatica, several customization steps are required to allow for manual entries of the depreciation amount. Below is a detailed explanation of these steps:

Step-by-Step Customization for Manual Depreciation Entry

1. Change Depreciation Method to “Manual”

   • Navigate to the Fixed Assets Module: Go to Fixed Assets > Manage > Assets.
   • Select the Asset: Open the asset record that needs to be manually adjusted.
   • Change Depreciation Method:
     • In the asset's Depreciation Method field, change the depreciation method to Manual. This is crucial because the manual method allows you to input depreciation amounts manually, overriding the standard calculations that use original cost and useful life.
     • If the asset is using another method (e.g., Straight-Line), changing it to Manual will stop automatic calculations and give you full control over the depreciation amounts.

2. Adjust the Useful Life and Remaining Life

   • Update the Useful Life: Change the asset’s Useful Life to reflect the new 60-month period.
   • Calculate Remaining Life: Determine how many months of the new useful life remain as of the financial year-end. For example, if the asset has been depreciating for 5 months out of the 60-month life, the remaining life is 55 months. You will need this value for calculating the monthly depreciation going forward.

3. Calculate the New Monthly Depreciation Based on NBV

   • Obtain NBV at Year-End: NBV (Net Book Value) is calculated as the original cost minus accumulated depreciation at year-end.
   • New Depreciation Calculation: Use the following formula to calculate the new monthly depreciation: New Monthly Depreciation=NBV at Year-EndRemaining Life in Months\text{New Monthly Depreciation} = \frac{\text{NBV at Year-End}}{\text{Remaining Life in Months}}New Monthly Depreciation=Remaining Life in MonthsNBV at Year-End​
     • For example, if the NBV at year-end is 86,111.11 and the remaining life is 55 months, the monthly depreciation would be 86,111.1155=1,565.66\frac{86,111.11}{55} = 1,565.665586,111.11​=1,565.66.

4. Manually Enter Depreciation Amount

   • In the Depreciation Details section of the asset record, you can now manually enter the monthly depreciation amount:
     • Under Depreciation History, input the new depreciation figure (e.g., 1,565.66) in the Current Period Depreciation field or equivalent field for the manual method.
     • This will ensure that the system uses the manually entered value for depreciation going forward.

5. Adjust Accumulated Depreciation (Optional)

   • If needed, you may also adjust the Accumulated Depreciation to match the actual depreciation taken so far, reflecting the correct NBV at the start of the new period.

6. Save and Verify the Changes

   • Once the new depreciation values are manually entered, save the asset record.
   • Run a test depreciation schedule to ensure the system calculates depreciation based on your manual entries rather than automatically reverting to the default calculation method.

7. Automate or Batch Process the Changes (Optional)

   • If you have multiple assets to adjust, consider using Acumatica’s Import Scenario functionality to automate the process:
     • Create a spreadsheet or data file with the updated depreciation amounts for each asset.
     • Build an import scenario that will update the depreciation method, useful life, and manually enter the new depreciation amounts for all affected assets in bulk.
   • This will save time and reduce the chance of manual errors when processing a large number of assets.

8. Review and Finalize Depreciation Schedules

   • Go to Fixed Assets > Processes > Depreciate Assets and run depreciation for the assets you updated.
   • Review the schedules: Ensure the new depreciation amounts are correctly applied for each month based on the remaining life and NBV.

9. Test in Sandbox Environment (Highly Recommended)

   • Before applying these changes in the live environment, test the process in a sandbox environment.
   • This allows you to verify that all steps work as expected without affecting the live data. Run through a full depreciation cycle to ensure the new settings function correctly.