Updating Book Depreciation during Renewal to depreciate the residual
It is not an uncommon scenario to have an operating lease asset that is set to depreciate down to a residual value. Once the contract matures and it moves into a renewal period you typically want to continue book depreciation to offset the renewal income.
In order to update the asset book depreciation to continue to depreciate you will follow these steps on the asset depreciation tab:
- Update the Depreciation Code to a Straight line to Zero depreciation code. (Refer to ASPIRE Help for creating Depreciation Codes)
- Update the Book Life for the additional number of months that you want the residual depreciated over. (Keep in mind that if you want the same amount of monthly depreciation taken it may not evenly divide into the residual amount and you may need to adjust the months up or down to the whole number)
- Check the box "Effective date for change" and enter in the date you want this to begin (i.e. renewal start date)
- Click Save
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