Hello
We asked Sage for advice on how to do this this was what they suggested
"The work must be done asset-by-asset as there is no bulk process for this. In
addition, the behavior of the product depends whether or not you are using a
straight-line method or a accelerated method like declining balance.
1) If you are using an
accelerated method then the system will calculate an adjustment amount on the
assets that you write-down. However, since an impairment is a write-down of
assets this should not affect you as the assets will be considered
over-depreciated after the impairment occurs. What would more than likely
happen is that you run out of basis before the natural end of the asset’s life.
2) If you are using a
straight-line method then it is possible to have no adjustment calculated and
have the system take the remaining NBV over the rest of the asset’s life. What
you do in FAS depends on how your journal entries for the write-down are going
to be completed. As I see there are two possibilities A) you are removing the
original asset from the books (cost and accum) and adding the new cost amount
using the original PIS date or B) you are crediting the Accum of the original
assets to write-them down to the appropriate amount and debiting an write-down
account to record the loss. What you do in the system depends on which method
you are imploring.
For example let’s
assume the following:
Original Asset
Property Type
P
PIS
1/1/2005
Cost
$10,000
Depreciation Method
SF
Estimated life 5
years
The asset is written
down to 3,000 at the end of March 2007. Note at this point the asset would
already have been $4,500.09 in depreciation (27 months X 166.67) making the NBV
$5,499.91 (10,000 Cost – 4,500.09 Accum). This makes the write-off 2,499.91
cents (NBV of $5,499.91 – 3,000). Once you have determined the information
above you have two choices
A) Remove old Asset
manually in GL and Change cost of asset in FAS
When using the
straight-line method for internal purposes then what you need to do is change
the value of the asset to the reduced amount, change the depreciation method to
RV (remaining value over remaining life) and then update the life field to
ensure the asset will fully depreciate on the desired date. Notice in this
case that no beginning information is recorded. The asset would look as
displayed below after the change.
Property Type
P
PIS
1/1/2005
Cost
$3,000
Depreciation Method
RV
Estimated life 2yrs
9mos
B) Record Write-off by
increasing accum amount
In this case the
original cost is left alone, change the depreciation method to RV (remaining
value over remaining life) and then update the life field to ensure the asset
will fully depreciate on the desired date. When you make the change in the
method the system will input the Beg Date as of the last time depreciation was
run and what was on the books at that time. At this point you will need to add
the amount of the write-down to both the Beg YTD and Beg Accum amounts to
reflect the increase to accum. The asset would look as displayed below after
the change.
Property Type
P
PIS
1/1/2005
Cost
$10,000
Depreciation Method
RV
Estimated life 2yrs
9mos
Beg Date
3/31/07
Beg YTD
$2,999.92
Beg Accum
$6,000.00
Hope this helps.
