Depreciation groups are defined for a fixed asset value model to describe the depreciation profile, the service life, and the parameters for deferrals that are generated when depreciating a fixed asset.

1. Click Fixed assets> Setup> Depreciation groups.

2. In the Value modelfield, select the value model that the depreciation group is defined for.

3. Press CTRL+N to create a new line.

4. Enter the depreciation group code and name in the FA groupand Namefields, respectively.

5. In the Depreciation methodfield, select a depreciation method for the depreciation group.

6. In the Lifetimefield, enter the maximum service life in years, during which depreciation will be accrued for the fixed assets within the depreciation group.

7. On the Generaltab, in the Minimum depreciationfield, enter the minimum depreciation amount when depreciating with the Reducing remaindermethod.

8. In the Date of depreciation beginningfield, select the depreciation starting date from one of the following options:

   • Putting into operation month start– Depreciation is calculated from the starting day of the month when the fixed asset is put in use after acquisition.

   • Next month start– Depreciation is calculated from the next month.

   • Next quarter start– Depreciation is calculated from the next quarter.

   • Next half year start– Depreciation is calculated from the next half-year.

   • Next year start– Depreciation is calculated from the next year.

9. Click the Deferralstab.

10. On the left pane, click Disposalto set up parameters to create deferrals on disposal of fixed assets with a loss. Click Partial take-downto create deferrals on partial write-off of fixed assets with a loss.

11. On the right pane, press CTRL+N to create a new line.

12. Select the deferral's model number in the Model numberfield.

13. In the Deferrals groupfield, select the deferrals group for deferred expenses.

14. In the Expense codefield, select the deferrals expense code.

    Note
    When you create a transaction for partial write-off or disposal of a fixed asset, and if the transaction results in a loss, the transaction details are posted to a deferral account. This account contains the value of the loss calculated and the write-off time. The write-off time is the difference between the useful life of the depreciated asset and the actual period of use before its disposal.