Draftworx Wiki

Appearance

Splitting Depreciation for the PPE Note (Cloud) ​

What it is: Two methods for breaking a single aggregated depreciation amount on the Working Trial Balance into separate figures per asset class, so that the Property, Plant and Equipment note in the financial statements shows depreciation by class.

What it's for ​

When a client's accounting system records all depreciation in one account (e.g. "Depreciation expense"), the PPE note in the financial statements will show a single lump depreciation charge across all asset classes. Most financial reporting frameworks and audit requirements expect depreciation to be shown per class of asset (e.g. land and buildings, motor vehicles, equipment). These two methods let you achieve the split without changing the client's chart of accounts.

How to do it ​

  1. On the Working Trial Balance, manually add a new account row for each depreciation sub-class (e.g. "Depreciation — Motor Vehicles", "Depreciation — Equipment"), assigning each a unique depreciation link number corresponding to its asset class.
  2. Create a Drafting journal entry that credits the original depreciation account and debits each of the new sub-accounts with the respective amounts.
  3. The PPE Note in the financial statements will now show depreciation split by asset class. Because this is a Drafting journal, it does not affect the client's processing trial balance.

Method 2 — Directly in the PPE Note (quick one-off adjustment) ​

  1. Open the Financial Statements and navigate to the Property, Plant and Equipment Note.
  2. Scroll to the yellow Rounding Correction cells at the bottom of the PPE reconciliation section.
  3. Enter the split depreciation amounts for each asset class in the relevant rounding cells.
  4. The note will update immediately to show depreciation by class. No journal is needed.

Method 1 is more transparent and easier to review; Method 2 is quicker for a one-off adjustment but relies on cells that are named "Rounding Corrections", which may be confusing to reviewers.

Source ​

https://draftworx.helpjuice.com/en_US/cloud/draftworx-cloud-splitting-depreciation-for-the-property-plant-and-equipment-note

Walkthrough ​