Depreciation of assets

The capitalisation and depreciation of all plant and equipment items is taken up at a corporate level. Portable and attractive items are expensed in the year of purchase and are therefore not depreciated.

Contact Assets (Corporate Finance) if you have questions about depreciation of assets.

Journals

At month end, 2 journal entries may be seen going through an operational unit’s asset expense and depreciation account:

One of the entries will have an AM source: it is the Asset Management module taking up the capitalisation or depreciation of the operational unit’s assets.
The second entry will have an ALO source: it is UniFi recognising that the operational unit should bear the expense of the asset purchase but not the depreciation expense and reversing the AM entry out of the operational unit.

Contact Assets (Corporate Finance) immediately if the AM and ALO entries do not net off to nil.

Corrections

Depreciation is posted by the Asset Management module to the chartfields the asset is recorded under.

As a result Assets (Corporate Finance) is unable to correct depreciation entries that are posted to the wrong chartfields.

To correct the chartfields the asset will need to be transferred out of the incorrect chartfields by completing and submitting an asset transfer form (DOC, 63KB) (DOC, 68 KB).

Transferring the asset will only correct future depreciation; prior-period depreciation cannot be corrected and will remain as is.

Method

The straight line depreciation method is used; it depreciates the asset evenly over its useful life. For example, as computing equipment is depreciated at 20%, a server costing $5000 will depreciate as shown here:

Year	Depreciation	Written-down value
1	$1000	$4000
2	$1000	$3000
3	$1000	$2000
4	$1000	$1000
5	$1000	nil