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Additional Dep'n Captured at Retirement

  • 1.  Additional Dep'n Captured at Retirement

    Posted Apr 12, 2019 08:05 AM
    ​I'm hoping to find some resolutions here before I go directly to Microsoft.  All of our fixed assets are setup with an averaging convention of "None".  This ideal so we depreciate to the date the asset was use till (ie - April 12).  When I retire an asset which has remaining net value, GP captures additional depreciation through the date of retirement.  Ultimately, this is correct.  But the journal entry isn't correct in its entirety.

    Asset Retirement Journal Entry example:

    Accumulated Dep'n     dr $5000
    Fixed Asset                                       cr $6000
    Dep'n Expense            dr $150
    Gain/Loss                    dr $850

    This journal entry should reflect all associated accumulated dep'n, but it doesn't.  When I look at the Retirements Transaction Report, it lists the Accumulated Dep'n as $5,150.

    For me, the journal entry should read something to this effect:

    Accumulated Dep'n     dr $5150
    Accumulated Dep'n                             cr $150
    Fixed Asset                                         cr $6000
    Dep'n Expense            dr $150
    Gain/Loss                    dr $850

    Though I'm not a fan of having a debit and credit touching the same account in a single journal entry, when it comes to accumulated dep'n and depreciation expense, it's kind of needed.  At the end of the day, Depreciation Expense should equal new Accumulated Depreciation.  But if there is a dr to expense and no actual cr to Accumulated, then they won't reconcile.

    ------------------------------
    Josh Case
    Great Lakes Forest Products Inc
    Elkhart IN
    ------------------------------
    GPUG Summit - Post


  • 2.  RE: Additional Dep'n Captured at Retirement

    TOP CONTRIBUTOR
    Posted Apr 12, 2019 03:02 PM
    The AJE looks okay to me.  Most programmers would net AJE's, and that is proper.

    I don't fully understand your meaning when you say,
    At the end of the day, Depreciation Expense should equal new Accumulated Depreciation.
    But if there is a dr to expense and no actual cr to Accumulated, then they won't reconcile.

    ------------------------------
    Bruce Strom
    Programmer Analyst
    Associated Grocers of Florida / Supervalu
    Sunrise FL
    ------------------------------

    GPUG Summit - Post


  • 3.  RE: Additional Dep'n Captured at Retirement

    Posted Apr 12, 2019 03:41 PM
    Any time I debit Dep'n Exp, I should credit accumulated dep'n.  Hence, the increases to Dep'n Exp. should always balance or equal the credits to accumulated dep'n  for the current period.​  I understand netting the entries to make it clean, but by doing so Accumulated Dep'n credits won't equal Dep'n Exp debits.  By reconciling the 2, you are able to verify proper entry.

    Also, I should be able to compare the Retirement report showing accumulated dep'n with the account.  These won't equal since only the net amount is being removed.  They'll be $150 off from each other.

    ------------------------------
    Josh Case
    Great Lakes Forest Products Inc
    Elkhart IN
    ------------------------------

    GPUG Summit - Post


  • 4.  RE: Additional Dep'n Captured at Retirement

    TOP CONTRIBUTOR
    Posted Apr 12, 2019 05:10 PM
    I would be extremely surprised if Great Plains could generate the AJE in pieces.
    BUT, since Great Plains usually lets you modify the journal entry yourself,
    you can add these additional lines yourself.

    Personally, my preference if this is not a fixed asset sale but a simple retirement,
    is to plug the remaining amount as depreciation expense and be done with it.
    Even it means editing the AJE to accomplish this.
    In practice, the IRS is really totally okay with this approach.

    ------------------------------
    Bruce Strom
    Programmer Analyst
    Associated Grocers of Florida / Supervalu
    Sunrise FL
    ------------------------------

    GPUG Summit - Post


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