Depreciation Adjustments

What is it and what is it for?

Every Fixed Asset has a value that decreases over time (depreciation). AdmCloud can calculate and record that depreciation automatically every month from the Depreciations screen, but there are cases where you need to record an extra amount of depreciation outside of that regular cycle: a correction, a one-off accelerated depreciation, or an adjustment your accountant asked for. That's what the Depreciation Adjustment is for.

A single document can include several fixed assets at once, each with its own amount to depreciate. On save, AdmCloud automatically generates, for each asset, a debit to its depreciation expense account and a credit to its accumulated depreciation account, taking those accounts from the fixed asset itself or, if it doesn't have them configured, from its fixed asset class, its subsidiary, or the company configuration (in that order).

The generated accounting entry is available from the adjustment's details, and it affects the Fixed Assets accounting period that matches the document's date.

How to use it

1. Open the list and click Create. You need the "add" level of the Depreciation permission.
2. Fill in the header: the adjustment's Date, the Subsidiary (if your plan uses it), the Reference and any Notes you need. If you set Location, Department, Division or Item Class on the header, that cost center is used as a fallback for assets that don't have their own configured.
3. On the Fixed Assets tab, add one line per asset to depreciate: pick the Fixed Asset and enter the matching Depreciation Amount. You can add as many lines as assets you need to adjust in the same document.
4. Attach supporting files on the Files tab, if you'd like (for example, the calculation or your accountant's instruction).
5. Save the document. AdmCloud automatically generates each line's accounting entry: a debit to the depreciation expense account and a credit to the accumulated depreciation account of the matching asset.

Key capabilities

• Includes several Fixed Assets in a single adjustment, each with its own depreciation amount.
• Automatically generates the balanced accounting entry (expense debit, accumulated depreciation credit) for every asset included.
• Resolves the expense and accumulated depreciation accounts in a cascade: first the fixed asset's own accounts, then its fixed asset class, then the subsidiary, and finally the company.
• Uses the cost center (Location, Department, Division, Item Class) set on the header as a fallback when the fixed asset doesn't have its own configured.
• Direct link to the generated accounting entry from the document's details.
• Attach supporting files to the document.
• Lets you duplicate an existing adjustment to speed up entering recurring adjustments.
• Printable report filterable by date range.
• Customize the columns shown on the list screen and save your own configuration.

Key fields

Validations on save

• Open Fixed Assets accounting period for the document's date and subsidiary.
• Must include at least one fixed asset in the lines; you can't save an adjustment with no assets.
• Each line's depreciation amount can't be zero.
• Each line's fixed asset must exist and not be marked as inactive.
• The fixed asset (or, failing that, its class, its subsidiary or the company) must have a valid depreciation expense account configured, classified as a "Depreciation Expense" type account; if it's not set up correctly, the adjustment can't be saved.
• If the document or a line sets a Location, it must belong to the document's own subsidiary.
• The Department, Item Class and Division selected can't be voided.
• The document number can't be changed when editing an already-saved adjustment.
• You can't edit, delete or void an adjustment that's already voided.

Managing the document

From an already-saved adjustment's details, depending on your permissions, you can:

• Edit it, as long as it isn't voided.
• Duplicate it to create a new one from its data.
• Void it (requires the "void" permission level); a voided adjustment keeps its history but stops affecting the books.
• Delete it (requires the "full" permission level), as long as it isn't linked to another dependent record.
• View the accounting entry generated by the adjustment.
• Attach or review supporting files.

Availability and permissions

• The Fixed Assets module is an add-on module of the Enterprise edition that your company activates separately; without it, this screen isn't available.
• Access is controlled by the "Depreciation" permission, with separate levels for browse, add, edit, delete and void.
• With Subsidiaries enabled, the Subsidiary is required on every adjustment and you can filter the list by it.
• The Void column on the list is hidden by default, but you can show it from the column selector.
• Custom Fields you mark as visible on Depreciation Adjustments also show up on the form, if your plan includes this feature.

Tips and common mistakes