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Machine Depreciation

Depreciation in the Equipment module records the systematic reduction in value of fixed assets over their useful life. JobNext tracks depreciation at the individual asset level, maintaining both the periodic depreciation amounts and the accumulated depreciation balance.

How to View Machine Depreciation 0:38

Depreciation Cycle

Asset in Register Cost, Rate, Method Group config Calculate SLM or WDV Per period amount Generate Voucher DR Depr. Expense CR Accum. Depr. Per Job via % alloc Post to GL Approve voucher Book value updated Schedule Updated Net book value Asset schedule refreshed Repeat each period (monthly / quarterly / annually)
Depreciation vouchers page showing periodic depreciation entries with asset details, depreciation amounts, and accumulated depreciation balances
Depreciation vouchers recording periodic asset value reduction

Why Depreciation Matters

  • Accurate Asset Valuation — Reflects the current book value of each asset
  • Cost Allocation — Depreciation expense is distributed across Jobs via Percentage Allocation
  • Disposal Prerequisite — Depreciation must be recorded before an asset can be disposed
  • Financial Reporting — Provides accurate fixed asset values for balance sheets

Depreciation Process

Step 1: Configure Depreciation Parameters

Set up the depreciation method and rate for each asset category. Common parameters include:

Parameter Description
Depreciation Method Straight-line, Written Down Value (WDV), or other applicable method
Depreciation Rate Annual percentage rate based on the asset's useful life
Useful Life Expected operational lifespan of the asset in years
Salvage Value Estimated residual value at the end of the asset's useful life

Step 2: Run Depreciation

Process depreciation periodically (typically monthly or annually). The system calculates the depreciation amount for each asset based on its configured parameters and the period.

Step 3: Review and Post

Review the calculated depreciation amounts and post them to the accounting system. This creates journal entries that debit the Depreciation Expense account and credit the Accumulated Depreciation account.

Accounting Entries

Account Debit Credit
Depreciation Expense Depreciation Amount —
Accumulated Depreciation — Depreciation Amount
Disposal Prerequisite

Depreciation must be recorded up to the disposal date before you can initiate asset disposal. The system will not allow disposal of an asset that has unrecorded depreciation periods. See Asset Disposal.

Cost Distribution

When an asset has a Percentage Allocation across multiple Jobs, the depreciation expense is automatically distributed according to the allocation percentages. This ensures each Job bears its fair share of the asset's depreciation cost.