Accelerate depreciation on assets down to 3 years

I am trying to accelerate a group of assets down to 3 years.  First - do I need to close my period before I run the new depreciation?  I have done the RV depreciation method for the internal book and changed the estimated life to 3 years.  I run the deprecation thru the end of September (our fiscal year) and then try to run the deprecation for September 23 to see if it has changed.  No changed has occurred.  

Just curious as to what I am doing incorrectly.  Any help would be appreciated.

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  • Hello Kent,

    First the Period Close, since you are doing critical value changes to the asset and assuming you are answering Yes-Current Thru Date to the questions, No, a Period close is not required because it is just going to get blanked out anyway.

    Second, I will be guessing a lot because I cannot be precise without the details of the assets:

    For the RV method to work, there must be a remaining life after the Beginning date so that if you changed the life to 3 years on all the asset but they were all Placed in service in 2019 or prior, there would be no remaining life to calculate the remaining value across. The life with the RV method must include the time from the Placed in Service date to the beginning date plus whatever remaining life that is desired. See How to fully depreciate an under depreciated asset? (16868) in which is attached a excel file which is a remain life calculator to assist in that process. 

    Of course, it is possible depreciation was ran through September when making the change and in answering Yes-Current Thru Date to the questions the Beginning date, being a manual override of depreciation, is holding the September numbers and you will not see the change until you run for October.

    ~Delray

Reply
  • Hello Kent,

    First the Period Close, since you are doing critical value changes to the asset and assuming you are answering Yes-Current Thru Date to the questions, No, a Period close is not required because it is just going to get blanked out anyway.

    Second, I will be guessing a lot because I cannot be precise without the details of the assets:

    For the RV method to work, there must be a remaining life after the Beginning date so that if you changed the life to 3 years on all the asset but they were all Placed in service in 2019 or prior, there would be no remaining life to calculate the remaining value across. The life with the RV method must include the time from the Placed in Service date to the beginning date plus whatever remaining life that is desired. See How to fully depreciate an under depreciated asset? (16868) in which is attached a excel file which is a remain life calculator to assist in that process. 

    Of course, it is possible depreciation was ran through September when making the change and in answering Yes-Current Thru Date to the questions the Beginning date, being a manual override of depreciation, is holding the September numbers and you will not see the change until you run for October.

    ~Delray

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