How to Run Depreciation

How to Run Depreciation in XoroERP:

1. Set Depreciation Date and Accounts:

   From the “Fixed Asset Configuration” module, set a Depreciation Date for calculating and recording depreciation in the system.

1. Fill in the Disposal Loss Account, Disposal Gain Account, and Capital Gain Account as necessary.

1. Hit “Update” to save the settings.

2. Run Depreciation Calculation:

   Navigate to the “Run Depreciation” module. Select the Date Range (To Date) for which depreciation needs to be calculated.

1. Click on “Run Depreciation” to initiate the calculation process. The module will automatically calculate depreciation amounts based on the depreciation method associated with each asset stored in the system.

RollBack Depreciation

The Rollback Depreciation function allows users to reverse depreciation entries for fixed assets. Instead of deleting or voiding the original depreciation entry, the system posts a reversal entry. This ensures transparency and maintains an auditable trail of financial transactions.

Process:

1. Identify the period for which depreciation needs to be rolled back.

2. Execute the rollback function, prompting the system to post a reversal entry:

   • Reversal Entry: Neutralizes the effect of the original depreciation entry by crediting the depreciation expense account and debiting the accumulated depreciation account.

3. Verify the updated balances in the affected accounts to ensure the reversal was executed correctly.

Key Points:

• Rollbacks are particularly useful for correcting errors or adjusting depreciation for changes in asset usage or status.

• Reversal entries maintain the integrity of the financial records, ensuring compliance with accounting standards.