Set up fixed asset for depreciation calculation

Overview

Business Central includes fixed asset depreciation calculations for the Indian localization.

The functionality supports block-based income tax depreciation and shift-based depreciation. Configure rates and periods for your applicable requirements; the setup doesn't determine legal eligibility.

Process

Following is the list of Setups, user needs to configure for Fixed Assets in Business Central.

Set up FA depreciation books

Fixed assets must have a depreciation book to record depreciations for the fixed assets.

  1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Depreciation Books, and then choose the related link.

  2. Fill in the fields as described in the following table.

    Field Description
    No. of Days Non Seasonal Specifies the number of non seasonal days.
    No. of Days Seasonal Specifies the number of seasonal days.
    FA Book Type Select Income Tax for block-based depreciation. Leave the field blank for shift-based depreciation.
    Depr. Threshold Days Specifies the threshold days for depreciation calculation.
    Depr. Reduction % Specifies the reduction percentage for depreciation calculation.

Before selecting Income Tax, clear Fiscal Year 365 Days and set both seasonal day fields to zero. The book validation requires these settings. Use the seasonal day fields for books with a blank FA Book Type.

Set up FA accounting period for income tax

Fixed Asset Income Tax Accounting Period needs to be created for depreciation calculation.

  1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Fixed Asset Accounting Periods Inc. Tax, and then choose the related link.

  2. Fill in the fields as described in the following table.

    Field Description
    Starting Date Specify the starting date of the accounting period.
    Name Specify the name of months.
    New Fiscal Year Specify which month is the starting of a new fiscal year.

Set up FA block code

Fixed Asset Block Code is required for depreciation calculation for Income Tax Act.

  1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter FA Classes, and then choose the related link.
  2. Select the relevant class, and choose Blocks.

  3. Fill in the fields as described in the following table.

    Field Description
    Code Enter the relevant code of the block.
    Description Specify the description of the block.
    Book Value Specifies the total book value of the block.
    Depreciation % Specify the depreciation percentage of the block.
    No. of Assets Shows the number of assets in the block with an income tax depreciation book and no disposal date.
    Add. Depreciation % Specify the additional depreciation percentage of the block.
    FA Class Code Specifies the fixed asset class code for which the block is attached.

Set up additional depreciation

Setup must be done to calculate additional depreciation for Fixed Assets.

  1. [!INCLUDE [open-search](../../includes/open-search.md)] Enter Fixed Assets, and then choose the related link.
  2. Open the relevant asset, and enable Add. Depr. Applicable.

Fixed Asset Depreciation

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