Overview:

Generating Plant Depreciation is done on a per-period basis and is one of the steps in the End of month processes, if Depreciation Costs are to be created from within Workbench. It utilises all information entered on each Plant Item to calculate the right cost per Plant per month. The Costs are Disbursement transaction on a Workbench Disbursement batch, created per Plant Item that is included by the user based on their selection criteria. The different options to select the Plant Items that need depreciation costs gerenated are adding Plants one by one, or using Plant Groups, or by leaving the Plant and Plant Groups filters blank to include all Plant Items.

• A month cannot be skipped as the system will not calculate missed months.

• When generating depreciation in the last period of the Financial Year, the Closing Book Value of the Plant Item becomes the Opening Book Value for the next year:

  • Opening Book Value is updated with the value after the depreciation was generated.

  • Opening Book Date is set as the day after the last day of the last Period.

• If the Plant Item was purchased during the year, the calculation is based on the number of months left in the year. The depreciation is pro-rata counting part-months as whole months for the remaining months of the Financial Year
  Example: Asset purchased in period 9 means
  Monthly Depreciation = OpeningBookValue * DepreciationRate * (9/12) / (12-9)

• The two Depreciation Methods available are:

  • Diminishing Value:
    Example: Asset is Purchased at $10,000 and the Annual depreciation rate is 10%

    • In the first year depreciation will be $1,000 or 10%. $1000 / 12 months = $83.333 per Month Depreciation

    • In the following year the asset is only worth $9000 and when it is depreciated 10%, it will be $900 / 12 months = $75 per month Depreciation

    • and so on
      
      

      Open

      

      Diminishing Value

  • Straight Line Value:
    Example: Asset is Purchased at $10,000 and the Annual depreciation rate is 10%

    • In the first year depreciation will be $1,000 or 10%. $1000 / 12 months = $83.333 per Month Depreciation

    • The Depreciation value remains the same for the rest of the life of the Asset, at $83.333 per Month Depreciation.
      
      

      Open

      

      Straight Line Method

Setup required:

1. Disbursement activity type, Depreciation, with the appropriate GL Code for Plant depreciation populated in it.

2. Populate Control Parameter 'Depreciation Activity Code' with the activity code above.

3. Configure each Plant Item (Depreciation tab on the Plant Item) with the correct depreciation details that will be used for the monthly depreciation calculations.
   
   

Screen Guide:

• Period is the month and year that Plant Depreciation disbursements are being generated for. This defaults to the current year/period in Period End Maintenance and determines what appears in the Batch list.

• Batch is the batch number that you want to generate Plant Depreciations into. The list is filtered by the Period selected. If there are no batches, create a New Batch using the button at the bottom.

• Batch Period, Batch Ref, Batch Date, Financial Company reflect what was selected when creating the Batch.

• Closed Date and Exported Date will be populated when the batch is exported from Batch Control.

The following fields are used as optional filters to narrow down the range of Plant Items that require depreciations costs created for:

• Plant (blank for all) manually add the specific Plant items of leave blank to include ALL plant items, or use the Plant Group filtering instead.

• Plant Groups (blank for all) similar use as Plant filter, add specific Plant Groups or leave blank for all Plant groups or use the Plant filter instead.

Buttons:

• New Batch is used to create a new batch to populate it with depreciation transactions. Batches are period based and will need to be created for each month and each Financial Company.
  
  

  • Choose a Batch Date within the desired Period, and give it a Reference and Financial Company that it relates to. Create Batch once finished, and select the newly created batch number from the Batch list.

• Generate creates Depreciation transactions based on the filter options selected, populating the selected Batch. A depreciation transaction can only be created once per Plant Item per Period. If the transaction already exists for the period, an error message will display warning about this.

Next Steps:

Once depreciation is generated, you can check the Disbursement batch from the Disbursement Batch under Month End/ Utilities. Alternatively, navigate to the specific Plant items, to check the transactions generated on the Depreciation tab. Transactions can be deleted from the Disbursement batch and the Generate process can be run again. Once satisfied with the results, navigate to Export Control to close the batch and export