The fixed assets module in Infusion does not recalculate already processed depreciation, even if they belong to the current financial year.
There are two ways of dealing with this:
- Sell the asset and re-enter – this is all done in the ‘current fixed assets financial year’
- Ensure the asset type is not set to claim depreciation on year of sale so the depreciation can be reversed for the year
- Sell the asset for the same amount of the opening book value for that year to generate a sale with zero loss and zero gain
- Re-enter the asset with the correct depreciation rate – the purchase value should be the same as the sale value of the previous asset
- Run depreciation as needed.
- Adjust the asset in the following year – this involves a financial year close off and an accrual journal
- Once they have done all transactions for the year, added all assets, ran all reports, etc. and are ready to finalise the year, take a backup and close off the Fixed Assets Financial Year.
- Enter a fixed asset adjustment for each asset, dated the first day of the new financial year, where the figure adjusted is the ACCUMULATED DEPRECIATION – this will bring the accumulated depreciation to the correct amount to make up for the incorrectly depreciated amount of the previous year AND it will correct the opening book value for the next period.
- Enter a manual journal for the last day of the financial year where the depreciation is wrong, where you will adjust your depreciation values (depreciation expense account against asset depreciation accounts). It is important this journal is set as accrual so it gets automatically reversed on the following day – this will allow the financial reports as at the end of the financial year to look correct, and the reversal on the next day avoids duplication of values because the fixed asset adjustments entered in step 3 will be in place