The Fixed Asset Modification (FM) transaction is the tool for changing depreciation settings. While the transaction can change any number of depreciation settings for use in the net depreciation run, the Recalculate from Beginning indication on the Component tab of the transaction enables a user to change any depreciation setting, short of Historical Value, and have the Mass Depreciation process and Transaction Depreciation recalculate depreciation from the beginning, using all of the changed and unchanged depreciation settings. This action will carry an overrideable error message to ensure proper authorization of this event, which is ‘the value was wrong from the beginning and depreciation needs to be adjusted to a level that would have resulted from the change being the initial setting.’
The indication defaults to true, if the applicable date for starting depreciation (Acquisition or In Service) is changed and the asset component has been depreciated before. Changing such a date in that situation implies a recalculation. Changes to other depreciation changes could come from a review of the condition of the asset and would only apply from the point of the change and forward.
The changing of an accelerated Depreciation Method to Straight Line is a common change made when the accelerated rate declines over time to equal the Straight Line rate. In this situation a user would not set the Recalculate from Beginning indication to true because the initial method was not a mistake but the new method should be used for the remaining useful life. This type of change would normally have an effective date at the beginning of a new depreciation year.
Changes to certain other depreciation settings do not behave in the manner of those discussed above – Asset Value (or commonly called Depreciation Basis) and Depreciation Structure. When these settings are changed, the Depreciation Elements Change (DEPEC) page is updated but Mass and Transaction Depreciation will only calculate using that New Asset Value or record using the New Depreciation Structure from the Effective Date of that change forward. It is not a recalculation and reposting from the beginning. However, if one of the other depreciation settings mentioned previously is changed at a later date and the Recalculate from Beginning indication is true, recalculation from the beginning will use that updated Asset Value and new Depreciation Structure.
It should be noted that any amount of depreciation adjustment from a recalculation will post in the fiscal year and accounting period defaulting or specified in the Mass Depreciation job or with the values from the fixed asset transaction when recording catchup depreciation.