Configure depreciation profile and posting profile for additional depreciation

This article explains how to configure a depreciation profile and a posting profile for special depreciation in Japan with Microsoft Dynamics 365 Finance.

In Japan, special depreciation is permitted under certain conditions. It is treated as extraordinary depreciation.

The following procedures were created using the demo data company JPMF.

Before you complete the procedures, you must first select the Fixed Asset configuration key.

Configure a depreciation profile

To configure a depreciation profile, follow these steps.

1. In Dynamics 365 Finance, go to Fixed assets > Setup > Depreciation profiles.
2. Select New.
3. In the Depreciation profile field, enter a value.
4. In the Name field, enter a value.
5. In the Method field, select Special depreciation.
6. In the Accounting method field, select an option. Select Reserve for the reserve method, or select Direct-off for the direct-off method for journalization. Reserve method is usually the preferred representation on a financial statement.
7. In the Apply number of periods field, enter a number.
8. In the Base ratio field, enter "1" for 100%. The actual value can vary depending on the fixed asset.
9. In the Special depreciation rate field, enter "0.3" for 30%. The actual value can vary depending on the fixed asset. The special depreciation amount is calculated as the product of acquisition cost, base ratio, and special depreciation rate.
10. Select Save.

Configure a posting profile

To configure a posting profile, follow these steps.

1. In Dynamics 365 Finance, go to Fixed assets > Setup > Fixed asset posting profiles.
2. Select Edit.
3. In the Transaction type field, select Extraordinary depreciation.
   • You must select Edit before you can modify the account fields.
   • Special depreciation is posted as extraordinary depreciation.
   • Optionally, you can configure Main account and Offset account.