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Change of Fixed Asset Useful Life in Dynamics GP

1.       Suppose an asset assigned with 5 years of useful life and depreciation has been performed since the asset is bought. According to the company depreciation policy, it need to change to 3 years and the depreciation need to be recalculated from the beginning of the Fixed Asset calendar year through the dates that the asset has already
been depreciated.

2.       In the Asset Book, change the number of years in <Original Life Year, Days>. Click <Save>.

3.       In the following message, select [Yes].

Extract from Microsoft Dynamics GP's Help
When you change a depreciation-sensitive field in the Asset Book window in Microsoft Dynamics GP, you receive the following message:“You have changed a depreciation sensitive field. This will result in depreciation values being recalculated. Do you wish to continue?”You will receive this message because depreciation amounts must be recalculated when a depreciation-sensitive field is changed for an asset. When you click Yes, the following options are available:•Life•Year•Recalculate 

         [Life] The Life option recalculates depreciation beginning with the Place in Service date through the dates that the asset has already been depreciated. If depreciation amount adjustments are needed for any period, the adjustments will update the Financial Detail file. Prior year depreciation amounts are posted to the current fiscal year to the prior year depreciation account. Prior year deprecation amounts do not post to the prior year. 

         [Year] The Year option recalculates depreciation from the beginning of the Fixed Asset calendar year through the dates that the asset has already been depreciated. If depreciation amount adjustments are needed for any period, the adjustments will update the Financial Detail file. 

         [Recalculate] The Recalculate option calculates a new rate of depreciation by using the new cost basis. The Recalculate option does not make adjusting entries for depreciation amounts already taken. The system will use the new rate of depreciation the next time that the depreciation routine is run.

4.       In the following message, select [Year]. This option will allow the depreciation to be recalculated from the beginning of the Fixed Asset calendar year through the dates that the asset has already been depreciated. Then select [Yes] to close the window.


5.       To update the general ledger, post the transactions that have not been posted yet. (Microsoft Dynamics GP menu >> Tools >> Routines >> Fixed Assets >> GL Posting)
In the Fixed Assets General Ledger Posting window, specify the Period field for the transactions that have not been posted, enter the required information, and then click Process.

6.    Post the Fixed Assets batch to the general ledger.
(Transaction > Financial > Batches)

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