NetAsset - Usage Based Depreciation

Overview

Depreciation varies from period to period based on the actual usage incurred by the asset. This article describes how to configure and generate usage-based depreciation schedules in NetAsset.

Prerequisites

  • The usage bundle has been installed by an administrator.
  • The Usage Based Depreciation setting has been enabled in NetAsset > NetAsset Setup > System Setup.

Key Assumptions

The Useful Life value entered on the primary information tab of the asset record is not relevant for usage-based depreciation. Whatever value is entered will automatically be updated once usage is processed. The depreciation schedule is driven entirely by usage data rather than a fixed useful life period.

Step-by-Step Process

  1. Navigate to a NetAsset record where depreciation should be based on usage.
  2. On the Usage subtab, confirm that an Estimated Lifetime Usage At In-Service value is present. Optionally, enter a Usage Unit of Measure.

  1. Click the New NG Asset Usage button to create a new usage record with the usage amount and the date it was incurred. If the volume of NetAsset Usage records to enter is high, this can be done via CSV Import as well.
  2. After all NetUsage records have been entered into the system, navigate to NetAsset > Update or Modify Assets > Generate Usage Depreciation Schedules to generate schedules.
  3. A filter screen will appear. Select the desired filters to narrow the subset of assets for which depreciation schedules should be generated.

  1. When satisfied with the filters selected, click Generate Schedules to initiate the schedule entry creation process.
  2. Refresh the page periodically to update the status of the processing and reveal the usage that has been processed.

  1. Click the link in the Asset column to view the asset's depreciation schedule, which will be updated with an entry for the depreciation to be recorded.
  2. Usage depreciation is calculated using the following formula: (Period Usage / Remaining Usage) * (Rolling Net Book Value - Residual Value)

  1. Once satisfied with the schedule entries created, monthly journals can be run as normal.
  2. Once the status is Complete, click the Export button to save the processed results as a .csv file.

Considerations

  • The Useful Life field on the asset's primary information tab does not drive depreciation calculations when usage-based depreciation is in use. This field will be automatically updated by the system once usage is processed.
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