Fixed Asset Register is not depreciating correctly
Article ID
fixed-asset-register-is-not-depreciating-correctly
Article Name
Fixed Asset Register is not depreciating correctly
Created Date
25th July 2024
Product
Problem
IRIS Fixed Asset Register is not depreciating correctly
Resolution
IRIS Fixed Asset Register is calculating the depreciation on the Cost figure instead of the net book value. Please read this article on the rules which is applied in the FAR: https://www.ionos.co.uk/startupguide/grow-your-business/calculating-depreciation Depreciation is not based on the residual value itself. The difference between Cost and Residual value is used to determine how much depreciation will be charged in total.
If you still disagree with the calculation: For Example, Motor Vehicle Cost £60,125, residual £26,393 in 4 years and applying it on a straight line basis. so therefore, the software should calculate the following: – Deprecation figure of £8,433 ((£60125-£26393)/4). However, Entering these values in FAR it provides a depreciation figure of £15,031.25 being £60,125 x 25%. WORKAROUND: – To adjust the FAR calculation, you will need a manual depreciation rate of 14.026% created and used for this particular asset (£8,433 / £60,125). This will need to be added in Accounts Production.
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