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Depreciation methods and conventions

Important

This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

You can select various depreciation methods and conventions. The purpose of the methods is to allocate the depreciable value of the fixed asset into fiscal periods. The depreciable value of the fixed asset is the acquisition price, reduced by a scrap value, if any.

If you are using depreciation conventions and you modify the last depreciation run date for an asset, which then causes some depreciations to be skipped, the depreciation for the last year might be more than or less than is expected. The depreciation is adjusted by the number of depreciation periods affected by the modification of the last depreciation run date.

For example, if you are using the Half year depreciation convention over three years, depreciation ordinarily occurs over 3 1/2 years. If you change the last depreciation run date during the 3 1/2 years, the last year of depreciation moves out the number of periods affected. If you move the date by three months, the last year will have nine months’ worth of depreciation, when ordinarily there would be six months’ worth of depreciation.

You can select from the following depreciation conventions.

  • Half year

  • Full month

  • Mid quarter

  • Mid month (1st of month)

  • Mid month (15th of month)

  • Half year (start of year)

  • Half year (next year)

The following topics provide information about depreciation methods and conventions:

About depreciation

About straight line service life depreciation

About reducing balance depreciation

About manual depreciation

About factor depreciation

About round-off depreciation

About consumption depreciation

About straight line life remaining depreciation

About 125 percent reducing balance depreciation

About 150 percent reducing balance depreciation

About 175 percent reducing balance depreciation

About 200 percent reducing balance depreciation

(AUS) About low value pool depreciation

Propose depreciation for fixed assets

(FRA) About RB/SL depreciation

(FRA) Derogatory depreciation