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Asset adjustment prorate Next month

in Assets 1 comment

In the corporate asset book we have the prorate convention to start depreciation at the start of the following month, i.e., acquisition January 15th the depreciation will start February 1st.

However, when we add a source line to the asset which comes as an adjustment and affect the cost, this adjustment should be amortized and the depreciation shall be spread over the remaining life of the asset.

However, the problem is that they expect the cost to have the same prorate convention logic as during the initial addition. I.e., the amortized cost should not start affecting the depreciation until the following month in the corporate book.

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