Question 1: When we do work on Indian fixed assets using the FAM module, what should be the depreciation method and depreciation rule we should use to match the Indian standards?
Answer: We cannot give you exact answer on this question, as it’s a responsibility of Accounting team of the Company to follow national and local regulations, and make sure that they are creating the asset as per requirements.
What we can help you with, is answer the questions on how you can create and set up the asset as per the given requirements.
You can read more on the Depreciation Methods and Depreciation Rules in the following SuiteAnswers articles:
- Depreciation Methods, Answer Id: 19095, and its related articles
- Manually Creating Asset Records, Answer Id: 19102, see Depreciation Rules under the headline General Subtab
Question 2: Could you please also suggest best practices to set up an Indian asset using the FAM module?
Answer: The most important is that your Accounting department checks what are the legal requirements for managing assets in your location. Once the information is gathered on Depreciation Rules and Methods, you can proceed with FAM Asset creation, as per your needs. You can read more on asset creation process in the following articles:
- Manually Creating Asset Records, Answer Id: 19102
- Creating Mid-life Assets by Importing CSV Records, Answer Id: 21804
- Creating Asset Records from Transactions, Answer Id: 19093
Question 3: As we understand in India, per month depreciation is calculated based on the number of days in the month.
We would appreciate it if you can provide us with any formula for the depreciation method according to the Indian fixed asset standard.
Answer: Unfortunately, there is no standard Deprection Method that would provide calculation based on the number of days in the month. This is currently filed as Enhancement # 255549 : Fixed Assets > Asset Depreciation > Depreciation Rules is set to Pro-rata > Compute for the depreciation amount based on the actual number of days of the month.
Unlike in NetSuite Support, APS does not have option to vote up an Enhancement on your behalf, however, if you would like to vote for this Enhancement to be available in the future, you can do so by using SuiteIdeas. Voting for an Enhancement request will provide a greater chance that it will be implemented in the recent future. Also, voting for an Enhancement request will grant you the ability to track the status of Enhancement and get notified once implemented.
More information about that can be found in the following SuiteAnswers articles:
• Steps to Navigate to SuiteIdeas, Answer Id: 30288
• Steps to Add Permission needed to Access SuiteIdeas, Answer Id: 74511
• Voting for Enhancements, Answer Id: 10054
• Check the Status of an Enhancement, Answer Id: 32561
• Accessing the NetSuite Account Center, Answer Id: 10038
As an alternate solution, it is possible to do the following:
- Make sure that in Fixed Assets > Setup > System Setup, that your Use Accounting Period Dates for Depreciation preference is disabled
- Make sure to create assets with 4–4–5 Calendar Depreciation method
- You must not use Pro-Rata as Depreciation Rule on the FAM asset record
- If the conditions from above are fulfilled, you will have depreciation schedules calculated as per the number of days in a specific month. You can read more about this method in the article: Preconfigured Depreciation Methods, Answer Id: 19283, under 4–4–5 Calendar Depreciation headline
I tested now this alternate solution, and it worked. This is my asset setup:
Namely, I created the asset with Asset Lifetime = 24 months, Derpeciation Rule = Aquisition, Depreciation Method = 4–4–5 Calendar Depreciation. The depreciation history which got generated is the following:
To conclude, this alternate solution can help you to achieve your goal, and have the asset depreciation, as per the number of days in the period.
I hope that this helps. Let me know in case of more questions, or if I can proceed with closing the case.