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As we know, the Net Book Value (NBV) of a fixed asset owned by a company should never be negative. SAP Business One Fixed Assets solution also ensure that the NBV of fixed assets in the application is greater or equal to zero.

If you see negative NBV in Asset History Sheet report, it might be caused by over-posted depreciation. Do you know how to check it?

 

Here is an example:

FA0010 has negative NBV -450 EUR at the end of fiscal year 2015.

 

Steps to check:

1. Check whether ‘NBV on Start Date’ in Asset History Sheet for the selected fiscal year is correct.

  • If correct – the negative NBV is caused in the selected fiscal year
  • If incorrect – the negative NBV is caused in previous fiscal year

In this case, NBV at the beginning of fiscal year 2015 is 1500 EUR – correct. We know that we need to check the data in fiscal year 2015.

 

2. Go to Fixed Assets Master Data and check the Planned Depreciation and Posted Depreciation in ‘Depreciation’ tab for relevant fiscal year.

In this case, ‘Posted Depreciation’ > ‘Planned Depreciation’ (difference: -600) in fiscal year 2015.

Root cause: ‘Planned Depreciation’ was changed from 1200 to 600 after posting a Capitalization Credit Memo.

 

3. Run depreciation for relevant fiscal year again to adjust the posted depreciation.

In this case, -600 is posted.

 

4. Check the Asset History Sheet again.

In this case, the ‘NBV on End Date’ is adjusted to 150 EUR – correct.

 

Why this issue happens?

  1. In Asset History Sheet, ‘NBV on End Date’ is calculated by ‘NBV on Start Date’ and ‘Depreciation’ – Posted Depreciation in the select periods, not Planned Depreciation.
  2. Some transaction(s) was added after user posted depreciation and it caused planned depreciation recalculation/decrease. For example, Life parameters change (Depreciation type, Depreciation Start Date, Useful Life), Capitalization Credit Memo, Retirement, Transfer.
  3. User did not run depreciation again to adjust the posted depreciation according to recalculated planned depreciation.

 

Recommendation

Always run depreciation to the last period of a fiscal year (again) before you close the current fiscal year and run fiscal year change to next fiscal year.

 

 

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