| Adjustment Journals |  |
| ERP LN identifies data for journal creation each time you adjust cost, accumulated depreciation, method, or life for an asset. Different journal entries result depending on the type of adjustment you make: For adjustments that increase cost, ERP LN debits the asset account and credits the capital accumulation account. For adjustments that reduce cost, ERP LN credits the asset account and debits the capital accumulation account. For adjustments that increase accumulated depreciation, ERP LN credits the accumulated depreciation account and debits the depreciation expense account for each line in the asset's distribution. For adjustments that decrease accumulated depreciation, ERP LN debits the accumulated depreciation account and credits the depreciation expense account for each line in the asset's distribution. For retroactive adjustments to life, ERP LN debits or credits the accumulated depreciation account and credits or debits the depreciation expense account for the difference, depending on whether the adjustment increased or decreased life. For prospective adjustments to life, no journal results. For adjustments to depreciation methods, ERP LN debits or credits the depreciation expense account and credits the accumulated depreciation account, depending on the change made. For example, a capital staff accountant at a company is asked to increase the cost of a propane forklift from $75,000 to $77,500, due to a clerical error during the original entry. The following journal is created: Journal Number 4040 Account F.Assets Machinery and Eqpt - None - None 2,500 debit Acquisition, Mach. and Eqpt - None - None 2,500 credit The adjustment was made effective from the asset's in-service date, so ERP LN also adjusts the accumulated depreciation and the related depreciation expense. New depreciation journals are created for those changes. The accounts used to create the adjustment journal are stored in the integration scheme or transaction schedule. When journals are created, ERP LN performs validation on the accounts and periods affected to ensure the entry is correct. A journal will not be created if the Suppress Journal Entries check box is selected. Note For intercompany assets, adjustments that cause a restatement of depreciation cause additional journal entries. |