Method of Depreciation – Consumption Depreciation – D365 F&O
Financial records of a Company should show its true and fair value of its assets and liabilities. In circumstances, for value of assets to be shown correctly, they have to be depreciated as per their use. For examples, car (kms run), production machine (number of hours run). In this case, straight line or reducing balance method of depreciation is not appropriate.
How to set up Consumption Depreciation in D365F&O:
- Go to Fixed Asset=>Set up=>Depreciation profiles=> choose method Consumption.
2. Set up consumption units under Fixed Assets=>Setup=>Consumption depreciation=> Consumption units.
3. Set up the consumption factor, either percent or units.
4. Define the depreciation method to the specific asset.
5. Run depreciation proposal by selecting consumption depreciation proposal.
This depreciation method is applicable to Manufacturing, Transportation & Logistics, Mining & Oil and Gas, Utilities & Energy, Agriculture, Printing and Publishing. This depreciation method is useful for performance-based maintenance and replacement planning.
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