Depreciation and Valuation

Depreciation is the expense share that can be shown in cases such as the wear and tear of the assets purchased by the enterprises for use. Over time, many items begin to deform due to their structure and the economic value of these items decreases. Therefore, expenses and values should be recorded over the economic life of the assets.

Route: ERP > Finance - Accounting > Fixed Asset > Depreciation and Valuation

Note: Fixed assets are depreciable assets. Fixed assets subject to depreciation must meet certain criteria in order to be considered fixed assets,

1. Assets must be owned by the business. For example, a leased fixture should not be presented as an asset. 
2. It should be for the benefit of the business.
3. The benefit must be at least one year.

Depreciation Listing Screen

Warning: The law determines the useful life of fixed assets. In the Workcube interface, fixed assets are evaluated with two depreciation methods. 

For example; We bought a machine worth 100 USD. Let it have a life of 5 years. We can depreciate in 2 ways.

1. Fixed Quantity - Standard
Purchase Value / Useful Life
100 USD / 5 = 20 USD
20 USD is depreciated each year.

2. Decreasing Balance
Useful life years divided by 100%.
100% / 5 years = 20% and this figure is multiplied by 2 when calculating depreciation.

• Year Depreciation Account = Purchase Value x ((%100 / 5) x2)
• Depreciation Account of the Year = (Value of the first year - Depreciation of the 1st year) x ((%100 / 5) x2)
• Each year, the value remaining from the previous year is used.

  Year	Amount	Depreciation	Accumulated Depreciation
  1.year	100 = A	40 = B = A x (%20x2)	40 = B
  2.year	60 = D = A-C	24 = F = D x (%20x2)	64 = B+F
  3.year	36	14,4	78,4
  4.year	21,6	8,64	87
  5.year	1,296	1,2296	100

Depreciation and Valuation Recording Screen

1. Section;

In this area, the assets are listed with the listing options. The date range for which the assets are received is determined. The date to be processed is a required field. Period selection should be made in the accounting period. The asset is recorded as a fixed asset in a fixed asset account. By selecting the account, the relevant assets are listed.

Warning: In the accounting period information, the period definitions entered in the purchase and transfer transactions in the documents are displayed. If the period of depreciation is 12 in the year valuation, it is made once a year. For the second year, the transfer to the next year must be done.

Note:At the end of each year, the government determines the amounts to be included in the depreciation calculations for the next year. The depreciation limit generally falls within the same limits as the billing limit. VAT is excluded in the depreciation rate calculations.

After filling in the relevant fields, clicking the "Search" button will list the relevant assets. The old and new values of the listed assets for the period are displayed.

2. Section;

Transaction type is selected. 

If the debtor and creditor accounts are not entered while recording assets, they must be entered in this field.

Finally, by clicking the "Revaluation" button, new values of the assets are created.

The accounting receipt is checked with the Offset Receipt screen in the top menu.

Warning: For example, the February valuation has been made, and after the March valuation is done, the update and delete buttons do not appear on the February valuation screen, the valuation is automatically closed. In order to be able to edit, editing can be done by deleting the next transaction.

Suggestion: For fixed assets subject to valuation, the current value of the fixed asset can be determined with respect to the increase and decrease in value. For detailed information, you can read our article "Maintenance and Repair Expenses that Provide Value Increase-Decrease".