Depreciation refers to the method of spreading out the expense of an asset throughout its lifespan. Within NetSuite, the system can automatically compute and log depreciation for tangible assets like machinery, automobiles, and structures. Nonetheless, there could be instances where it’s necessary to undo depreciation entries in NetSuite.
Introduction
Before we dive into the process of reversing depreciation in NetSuite, let’s first understand what depreciation is and why it is important. Depreciation is a financial accounting concept that helps businesses spread out the cost of an asset over its useful life. This allows companies to accurately reflect the value of their assets on their balance sheet and income statement.
Why Reverse Depreciation?
There are several reasons why you may need to reverse depreciation in NetSuite. For example, if an asset is sold or disposed of before its useful life has ended, you will need to reverse the remaining depreciation on that asset. Similarly, if there is a change in the estimated useful life of an asset, you may need to adjust the depreciation schedule and reverse any excess depreciation that has been recorded.
Reversing Depreciation in NetSuite
To reverse depreciation in NetSuite, you will need to follow these steps:
- Go to the Fixed Asset module and select the asset for which you want to reverse depreciation.
- Click on the “Depreciation” tab and select the depreciation schedule that needs to be reversed.
- Click on the “Reverse Depreciation” button and enter the date up to which you want to reverse depreciation. You can also choose to reverse all depreciation or only a specific period.
- Click on the “Save” button to save your changes.
Conclusion
In conclusion, reversing depreciation in NetSuite is a simple process that can be done by following a few steps. It is important to keep track of depreciation and make any necessary adjustments to ensure accurate financial reporting.
