Fixed Asset Troubleshooting: To Change the Useful Life of an Asset

The following activity will walk you through the process of changing the useful life of an asset.

Story

Suppose that an accountant at SweetLife Fruits & Jams created the Office software fixed asset with an acquisition cost of $750, a useful life of three years, and the SL (Straight-Line) depreciation method, and depreciated the asset for two periods. Then the accountant decided to increase the useful life of the asset to five years. Acting as the SweetLife accountant, you need to change the useful life of the asset and depreciate the asset from 07-2024 to 08-2024.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

Process Overview

In this activity, you will change the useful life of an asset on the Fixed Assets (FA303000) form. On the Calculate Depreciation (FA502000) form, you will depreciate the asset for two periods and review the depreciation amounts on the Depreciation tab of the Fixed Assets form.

System Preparation

Before you begin changing the useful life of the asset, do the following:

  1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as an accountant by using the johnson username and the 123 password.
  2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, click the Business Date menu button, and select 7/1/2024 on the calendar.
  3. In the company to which you are signed in, be sure that you have implemented the fixed asset functionality by performing the following prerequisite activities: Fixed Assets: To Configure the System for Fixed Asset Management, Fixed Assets: To Configure the Fixed Asset Functionality, and Fixed Assets: To Create Fixed Asset Classes.
  4. Make sure that you have completed the Fixed Asset Creation: To Create an Asset with Multiple Units prerequisite activity to create the Office software fixed asset.
  5. On the Company and Branch Selection menu on the top pane of the MYOB Acumatica screen, select the SweetLife Head Office and Wholesale Center branch.

Step 1: Changing the Useful Life of the Asset

To change the useful life of the fixed asset, do the following:

  1. On the Fixed Assets (FA303000) form, open the Office software fixed asset.
  2. On the General tab, enter 5 in the Useful Life, Years box.
  3. On the form toolbar, click Save to save the changes.

Step 2: Depreciating the Asset

To depreciate the fixed asset, do the following:

  1. Open the Calculate Depreciation (FA502000) form.
  2. In the Selection area, specify the following settings:
    • Company/Branch: HEADOFFICE
    • Book: FIN
    • To Period: 08-2024
    • Action: Depreciate
  3. In the table, select the unlabeled check box for the Office software asset and click Process on the form toolbar.
  4. On the Fixed Assets (FA303000) form, open the Office software fixed asset.
  5. Review the Depreciation tab.

    The system has calculated depreciation for 07-2024 and 08-2024, and recalculated depreciation for the previous periods. Because the depreciation expenses for 07-2024 exceed the newly calculated amount, the system posts a negative depreciation amount in 07-2024.