When you view an asset placed in service in the same fiscal year, FAM displays an incorrect dollar value on the prior depreciation. This corrupts the depreciation figures which results to the specific error. This error may also caused by selecting Post Entry to QuickBooks.
The Accumulated Depreciation account in QuickBooks Desktop must be equal to Prior Depreciation in FAM. If an asset has been tracked in QuickBooks Desktop and FAM from the time it was acquired, this journal entry should be in balance. If it is out of balance, it may be caused by one of the following:
- The asset was entered in QuickBooks FAM mid-life without entering the accumulated depreciation from its acquisition date.Example: An item was purchased and entered into the Fixed Asset Item List in QuickBooks Desktop Pro (which does not have QuickBooks FAM). The file is then used in QuickBooks Desktop Premier Accountant by the company’s accountant in order to calculate asset depreciation. If FAM is opened without first creating a correcting journal entry in QuickBooks, then FAM will read $0 as the amount of accumulated depreciation for the asset.
- The calculated amount for prior depreciation was changed in FAM.Example: FAM is rolled back to a previous fiscal year (possibly due to printing a report for that fiscal year). This can cause any value in the prior depreciation field to remain the same number it was prior to changing the dates.
- The asset is marked as disposed and the asset value and accumulated depreciation value has not been cleared in QuickBooks Desktop.
Solution 1: Make an adjustment using a General Journal Entry in QuickBooks, then update FAM assets from QuickBooks Desktop
- From the Reports menu of your FAM > Display Reports > Depreciation Schedule by G/L Account Number.
- Select the appropriate Basis for your report (i.e. Federal, State, AMT, etc.). If you are not sure which Basis is appropriate, consult your accountant.
- In the Date field, enter the date that is the of beginning of your current fiscal year.
- On the report, make note of the total in the first Accumulated Depreciation column (the date below this should be the beginning of your current fiscal year).
- From the Lists menu of QuickBooks Desktop, select Chart of Accounts.
- Right-clickthe Accumulated Depreciation account and select Quick Report Accumulated Depreciation.
- Change the date to the end of the previous fiscal year, then make note of the total amount.
- If there are multiple subaccounts, make note of all the total amounts and add them together.
- Subtract the amount in step 4 from the amount in step 6. This is the amount that you must enter as an adjustment via a General Journal Entry in QuickBooks Desktop.
- From the Company menu of your QuickBooks Desktop, select Make a General Journal Entry.
- Change the Date to the end of the previous fiscal year and select Adjust entry.
- In the Account field, select the Depreciation Expense account. Enter the amount from step 7 in the Debit field.
- In the Memo field, type Adjust entry to match QB to FAM.
- On the next line, select Accumulated Depreciation account, then enter the same amount in the Credit field.
- Select Save & Close.
- If necessary, repeat the process for the subaccounts.
- In FAM, go to the QuickBooks menu and select Update Assets from QuickBooks, then select OK > Yes to All.
Solution 2: Roll FAM back to the appropriate fiscal year, recalculate assets and depreciation in FAM, correct reports as necessary, then roll FAM forward to the current or appropriate fiscal year
- Open FAM. From the File menu, select Backup.
- Leave the default location and select Backup.
- From the File menu, select Client Information.
- Go to the Dates tab.
- Change the current year to the fiscal year that you are rolling back to and select OK.
- From the Tools menu, select Recalculate All Assets > Recalculate all prior depreciation values.
- Select OK, then Yes on the backup prompt.
- From the Tools menu, select Prepare for next year.
- Select Yes. This will roll the program forward one fiscal year.
- Continue with steps 8 through 10 until the current fiscal year is displayed.
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