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How to stop depreciation on an asset being held for sale

Created on  | Last modified on 

Summary

Steps to stop and restart depreciaiton on assets held for sale.

Cause

It may become necessary to stop depreciating an asset for a short period of time or prior to the disposal of the asset. The depreciation method can be changed to either NO (normally use for non-depreciable assets) or OC (Own Calculation) which a manual method of depreciation.

Resolution

IMPORTANT: Before starting this process:

  • There is not a way to 'undo' a change to critical values. Ensure there is a way to retrieve the asset data as it was prior to making the changes by having the details of the assets written down, printed out, or a current Company Backup before making changes. See How to back up a company.
  • Have depreciation on the asset(s) ran through the date when the change will be effective.

To Stop an asset from calculating depreciation in Sage Fixed Assets:

Note: Ensure Depreciation has been ran through the end of the desired month before making the change.

  1. Enter NO or OC into the Depreciation Method field.
  2. Click the Save button, or tab out of the field.
  3. Sage Fixed Assets will prompt you with two questions:
    1. Answer Yes the first question to continue.
    2. The second question: When would you like to apply the critical depreciation change? Select the Current Thru date as the date to apply the change. See How to change critical depreciation fields for information on the other selections.

Note: This process can be done for multiple assets through the Bulk Edit feature, see How to perform a Bulk Edit of Critical Depreciation Fields for more information.

After the change, run depreciation normally until depreciation will need to start accumulating on the asset again. When it is time to continue depreciation:

  • If the depreciation method used is NO and providing there is remaining life on the asset: Change the depreciation method to the RV method (Answering Yes and Current Thru date to the questions).
  • If the depreciation method used is OC and is being disposed of: No changes need to be made to the asset prior to the disposal
  • If the depreciation method used is OC, depreciation need to be started again and there is remaining life on the asset: Change the Beginning date to be the date when depreciation will start again and change the depreciation method to the RV method (Answering Yes and Current Thru date to the questions)

    This will then take the remaining value over the remaining life and will ensure the asset will fully depreciate within the asset's useful life.

If the asset is beyond its useful life and the asset still needs to be fully depreciated, Change the depreciation method to the RV method (Answering Yes and Current Thru date to the questions) and the Estimated life will need to be lengthened to allow the asset to continue to depreciate. See How to fully depreciate an under depreciated asset for more information

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