NetAsset - Grouped Depreciation: Setup
Overview
Grouped Asset Depreciation (also referred to as FERC or Regulated asset depreciation) supports industries that depreciate assets at a pool level rather than individually. Instead of each asset producing its own depreciation calculation, schedule, and journal entry, all assets that share an asset type are aggregated and depreciated as a single group for the period. One journal is posted per period / subsidiary / asset type combination, and per-asset schedule lines are written for traceability.
This feature is intended for use cases such as:
- FERC (Federal Energy Regulatory Commission) regulated assets — utilities and energy companies that report under FERC accounting rules.
- Part 32 Telecommunications assets — telecom carriers that depreciate using an average basis between the beginning and ending balances of the period.
- Subsidiary-specific rates — setting up different grouped asset types per subsidiary when rates vary by entity.
Grouped Depreciation is built specifically for US regulated companies. Similar requirements by other governments are not tested nor proven to work with this setup.
Configure System Setup
The first step is enabling the ability to run Grouped Depreciation.
Navigate to NetAsset > NetAsset Setup > System Setup > System Features. Check the box for Grouped Depreciation.
Once this box is checked, the remaining features will become available.
Depreciation Methods
Two depreciation methods will become available once the global setting is turned on:
- Fixed Asset Group (Average)
- Fixed Asset Group (End of Period)
Both methods will be locked to editing. The method is used to determine the asset balance used in the depreciation expense calculation.
| Method | Definition |
| Fixed Asset Group (Average) | Asset Balance = (End of Prior Period Asset Balance + End of Current Period Asset Balance) / 2 |
| Fixed Asset Group (End of Period) | Asset Balance = End of Current Period Asset Balance |
Asset Type Record
The Asset Types are determined by the user. They should be a 1:1 relationship of Asset Type : Asset Depreciation Group : Depreciation Percentage.
To navigate to the Asset Type records, go to NetAsset > NetAsset Setup > Manage Asset Types & Mappings. Follow the steps in NetAsset - Configure Asset Types & Mappings for general type setup. Asset Types can be imported or entered manually.
The additional fields for configuring a Grouped Asset type are:
- Check the Grouped Asset Checkbox on the Asset Type record.
- Once checked, the Default Depreciation Method will be limited to either the End of Period or Average options. Select the correct method for the asset balance calculation.
- Enter the applicable annual depreciation rate in the Annual Grouped Basis Rate (%) field.
Asset Record
"Grouped Asset" Asset Records are the subledger of asset values used to calculate depreciation expense for the group. There are no additional fields on the Asset Record related to Grouped Asset depreciation. To associate an asset cost to a "group", simply assign the asset to that Asset Type.
See article for NetAsset - Grouped Depreciation: Asset Creation for details on the Asset Record.
