Microsoft Dynamics AX Support

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Processing Depreciation for Depreciation Tax Books in AX 2012

There are two types of Books in AX 2012 relative to recording depreciation for Fixed Assets:

Value Models = Value models track the financial value of a given asset over time for the purposes of financial accounting for depreciation within your General Ledger. An example of a Value Model would be CORP.

Depreciation Books = Depreciation books track the value of a given asset over time for the purposes of accounting for Tax-book depreciation solely in the Fixed Assets Subledger. Examples of Depreciation Books would be:  AMT; FED; STATE.

With the setup of Value Models and Depreciation Books, AX 2012 allows you to derive certain Transaction Types between Value Models and Depreciation Books. For example, if you have a Value Model called CORP and you have three Depreciation Books AMT/FED/STATE, you could set the ‘Acquisition’ to be a Derived Transaction Type between the CORP Value Model and AMT/FED/STATE Depreciation Books. By doing this, any time that you enter an Acquisition against an asset’s CORP Value Model, the Acquisition will simultaneously record the Acquisition for the AMT/FED/STATE Depreciation Books.

When you setup your Value Models, AX 2012 also allows you to select the ‘Depreciation’ Transaction Type as being Derived between the Value Models and your Depreciation Books. We often see customers attempt to configure deriving the ‘Depreciation’ transaction type between the Value Models and their Depreciation Books, but the accumulated depreciation recorded on the Depreciation Books does not appear appropriate based on the posting of a standard Fixed Assets Journal. It is important to note that Depreciation processing is not designed to handle using ‘Depreciation’ as a Derived transaction type between your Value Model and Depreciation Books in AX 2012. Processing depreciation in AX 2012 for your Value Models is considered a separate process than the processing of depreciation in AX 2012 for your Depreciation Books. We do not recommend setting the ‘Depreciation’ and ‘Depreciation adjustment’ transaction types to be Derived between Value Models and Depreciation Books in AX 2012. Depreciation should be recorded appropriately as follows:

1.  Value Model Depreciation should always be initiated through the Fixed Assets Journal. (Fixed assets | Journals | Fixed assets)

2.  Depreciation Book (Tax Book) Depreciation should always be initiated through the Depreciation Book Journal. (Fixed Assets | Journals | Depreciation book journal)

Thanks, Ryan