Depreciation
Depreciation spreads an asset's cost across its useful life. The design decision that matters: it is written for each period, not recomputed whenever somebody looks.
Where to find it
Architect Panel → ERP - Operations:
- Depreciation — the posted charge per asset per period
- Assets — the method, life and residual value
Architect Panel → Automation:
- Tasks — the Asset Depreciation task, daily
Why written, not recomputed
If depreciation were calculated on read, editing a useful life or a residual value would restate every period already reported. Somebody adjusting an estimate in October would change what was reported in March — without intending to, and without anybody noticing.
Writing the charge means posted figures stay posted. A change to an estimate affects future periods, which is also how accounting standards expect a change in estimate to be treated.
Re-running a period is refused
Running depreciation for a period already run is rejected rather than silently doubling the charge.
Depreciation runs are usually scheduled, and a scheduled job that runs twice because of a retry or an overlapping window is not unusual. Refusing the second run is what makes the schedule safe to leave alone. If a period genuinely needs correcting, post an adjustment, visible as such.
Setting up
Depreciation needs the method, the useful life and any residual value — usually held at class level so a policy is applied consistently rather than decided per asset by whoever created it.
Running it
The Asset Depreciation task ships disabled. Enable it daily so a period end is never missed, and run depreciation as part of period close, before closing. The charge posts to the ledger like any other journal, so it appears in the period's figures and in the trial balance you review.
Assets acquired mid-period
Decide your convention — full period in the month of acquisition, pro-rata by days, or none until the following period — and apply it consistently. Any of them is defensible; changing between them is not, and it is the kind of inconsistency an auditor finds quickly.
Checking
Reconcile accumulated depreciation to the register periodically. A divergence usually means an asset was added with a wrong acquisition date, or a disposal was recorded without stopping the depreciation.
Worked example
A company runs depreciation nightly. At month end the charge is already posted, so close is a review rather than a task. A laptop disposed of mid-month stops depreciating from the disposal date, and the year-end reconciliation between accumulated depreciation and the register agrees to the penny — which is what makes the audit straightforward.
Recommendations
- Hold method and life at class level, not per asset.
- Run daily so a period end is never missed.
- Fix the mid-period convention once and write it down.
- Reconcile to the register at least annually.