In Fixed Assets CS, it is possible to move back to prior periods and change the bonus depreciation options. When going back to a prior period and changing the bonus depreciation elections (either from electing out to calculating bonus or from calculating bonus to electing out) it is necessary to reclose (merge) to bring forward the updated depreciation calculations. However, the change to the bonus depreciation elections entered under Setup > Options > Bonus Depreciation Elections will not come forward when merging and must be remarked in each succeeding year.

For example, consider a client that is currently in the 2015 period and the decision has been made to move back to 2013 and elect out of bonus depreciation. The first step would be to move back to 2013 and elect out of bonus depreciation under Setup > Options > Bonus Depreciation Elections > 2013. The client would then be closed to 2014 to bring forward the updated current depreciation calculation by choosing File > Select Period to Process.

If in the 2014 period you were to choose Setup > Options > Bonus Depreciation Elections and click the 2013 tab, the elect out options that were entered in the 2013 period will not be marked. The prior depreciation will properly reflect that bonus depreciation was not taken, but you must elect out of bonus depreciation for 2013 again in the 2014 period. This will ensure that if prior depreciation is recalculated it will not include bonus depreciation. When the client is advanced to 2015, the same is true. You must access Setup > Options > Bonus Depreciation Elections > 2013 to elect out again.

The basic concept is that if the bonus depreciation elections are changed in a prior period the correct calculation will be brought forward by using the Merge option. However, the change to the bonus depreciation elections will not be merged forward and if prior depreciation is recalculated it will not properly reflect the prior year elections.

Was this article helpful?

Yes No

Submit