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Fully depreciated asset still has remaining Net Book Value (NBV) amount in Fixed Assets for Microsoft Dynamics GP


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Symptoms

This article explains why an asset may be retired or is flagged as fully depreciated, but yet there is a remaining amount in the Net Book Value (NBV) field in Microsoft Dynamics GP. 

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Cause

This issue happens because no Switchover method was used. 

When as asset has a depreciation method other than Straight-Line method (such as a Declining Balance method), and there is no Switchover method defined, it is normal for an asset to be fully depreciated, even though there is a remaining Net Book Value amount. Because there is no Switchover method, the depreciation calculation will never reach $0. The fully depreciated flag is set to Y because the Remaining Year, Days has reached zero.

A Switchover method is needed for other types of depreciation (other than Straight-Line) to ensure the NBV will reach $0.00 at the end of the asset's life. The purpose of the Switchover method is to take effect when the system determines that the Straight-Line method will take more depreciation than the selected depreciation method, to ensure the NBV amount will reach $0.00 at the end of its original life. 


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Resolution

Use these steps to recalculate the depreciation and get the NBV to reach zero:

1. Make a backup of the company database and copy it to a test company.  It is recommended to test these steps in a test company first before doing this on your live database.

2. Go to the Asset Book window for the asset. To do this, click Cards, point to Fixed Assets, and then click Book. Enter the appropriate Asset ID and Book ID. 

3. In the Switchover field, click Straight-Line.

3. Click Save. You are prompted with following message: 
You have changed a depreciation sensitive field. This will result in depreciation values being recalculated. Do you wish to continue?
Click Yes.

4. You are prompted with the following message:
A depreciation sensitive field has changed. Please select one of the following "Reset" options.
 Usually you will click to reset the Life. This will back out all the depreciation for the life of the asset and recalculate it, which could change the depreciation numbers. (Most often you have to reset Life. In some cases, you may get by with only resetting the Year, but if the switchover method needs to take over before the current year, then reset Year may not be sufficient.)

Note Reset Life will recalculate the depreciation on the asset life to date. Reset Year will only recalculate the depreciation for the current year. And Recalculate will only be used going forward.
  For more information about these options and depreciation sensitive fields, click the following article number to view the article in the Microsoft Knowledge Base:  
855314   Information about chaning a depreciation-sensitve field in the Asset Book window in Fixed Asset Management in Microsoft Dynamics GP
  


5. After you have verified the results of the recalculculated depreciation in the test company, follow the same steps in the live company. 


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More Information

If you retire an asset that has a NBV amount, it will remain. Retiring an asset will not set the NBV amount to zero.

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Article Info
Article ID : 2652477
Revision : 1
Created on : 1/7/2017
Published on : 2/9/2012
Exists online : False
Views : 272