Depreciation Cost Transfer Features and Functions
Automatic Transfer of Depreciation: Once depreciation has been calculated for each piece of equipment, entries must be made to the General Ledger at the end of each accounting period to reduce the asset value and recognize that reduction as an expense. While many systems will make the calculations, some are not integrated with the rest of the accounting system. Companies departmentalizing their accounts might choose to charge each department with their fair share of depreciation. The software should have the ability to make the appropriate charges. Following this logic, it would make sense for depreciation to be reported to the Job Cost module as well, depending upon the needs of the user. This distribution is not as simple as the reporting to the General Ledger. The cost may have to be spread over several projects depending upon the utilization of the equipment. This will be discussed in the section dealing with Job Costing. The important fact here is that depreciation will be reported to the Job Cost module.
- Automatic transfer of depreciation to general ledger
- Automatic transfer of depreciation to departments
- Automatic transfer of depreciation to job cost
Cost Calculation and Distribution Features and Functions