Enhancement to account determination in derived depreciation areas (reserves for special depreciation)
Description
When an asset with reserves for special depreciation is sold, a loss for book depreciation arises, and revenue is earned as the relevant reserve for special depreciation is cleared due to the asset retirement. There are two ways of accounting for this transaction for the purpose of rendering accounts:
- Post the loss and the clearing of the reserve for special depreciation for the asset with revenue (variant 1 - this is the standard posting technique up to Release 3.0)
- Include the clearing of the reserve for special depreciation in the profit/loss calculation (variant 2, possible from Release 3.0)
For variant 2, accounts for profit/loss on assets retirements have been added to account determination in derived depreciation areas. If you set up accounts here, the system does not post revenue arising from from the clearing of reserves for special depreciation, but accounts for the profit/loss by means of a contra posting, and posts the total/ difference betwen the revenue arising from the clearing of the reserve for special deprecation, and the profit/loss from the point of view of book depreciation, as profit or loss on these accounts.
Example
Asset retirement/depreciation areas as in the standard chart of depreciation for Germany:
| commercial book value. | 70 |
| tax book value. | 40 |
| reserves special depreciation | 30 |
| revenue from retirement | 50 |
The system makes the following postings in the profit/loss accounts
| Loss account | 20 debit and 20 credit |
| Profit account | 10 credit |
Change system parameters in customizing
If you do not want to use variant 2, you must not enter any accounts in the new account fields. If you do want to use it, you must revise account determination in your derived depreciation areas for reserves for special depreciation.
Proceed