How to Stop the Automatic Depreciation Entry for an Asset
The automatic depreciation entry is created by the system automatically for assets whose depreciation method is Straight-Line or Declining Balance (Percentage), on each depreciation date. And how to stop it depends on: has any depreciation been created for the asset so far or not?
First: If No Depreciation Has Been Created for the Asset Yet
Choose the depreciation method No Depreciation, so the system doesn’t create any automatic depreciation entry for this asset:
- Go to Assets, then view the asset and click Edit.
- In the Asset Depreciation section, choose from the Depreciation Method field: No Depreciation.
- Click Save.
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Note: If the Service Start Date is a past date, the system creates the due depreciation entries as soon as the asset is saved. So choose No Depreciation when adding the asset itself if you don’t want to depreciate it.
Second: If Depreciation Has Already Been Created for the Asset
After the first depreciation is created, the Depreciation Method field disappears from the edit page, and if there is more than one depreciation the message There are previous movements for the asset appears and the asset cannot be edited. So you need to handle the created entry first:
| The Method | When to Use It | What Happens |
|---|---|---|
| A reversing entry | When you want to keep the depreciation entry as it is in the records, and correct its effect in the accounts only. | Create a manual entry from Add Entry with the same amount and the same two accounts with the sides reversed: debit Accumulated Depreciation and credit Depreciation Expense. The entry’s effect in the accounts is corrected, but the depreciation record stays on the asset and its current value stays reduced, and the system continues creating the upcoming depreciation entries. |
| Delete the depreciation from the asset then choose No Depreciation | When you want to cancel the depreciation permanently and stop the upcoming automatic entries. | The depreciation entry is deleted automatically, and its amount is returned to the asset’s current value. And after deleting all the depreciations, the depreciation method field appears again so you can choose No Depreciation. |
The steps of deleting then stopping:
- View the asset from Assets, and open the Depreciations tab.
- Delete the depreciation (or depreciations) with the Delete button next to it, then confirm the deletion.
- After deleting all the depreciations, click Edit on the asset page, and choose No Depreciation in the Depreciation Method field, then save.
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Notice: Carry out the third step right after the deletion; because if the depreciation method stays Straight-Line or Declining Balance, the system recreates the deleted depreciations on the next run. And a depreciation whose date falls in a closed period cannot be deleted.
Notes
- The depreciation entry cannot be deleted directly from the journal entries screen because it is an automatic entry; delete it from the Depreciations tab in the asset or handle it with a reversing entry.
- If you want to stop the depreciation after a certain date only while keeping what preceded, specify the Depreciation End Date when adding the asset.
- An asset with the Units of Production method doesn’t have automatic depreciation created for it, and its depreciation is recorded manually from Add Manual Depreciation.