Purpose
This report processes assets that were acquired before January 1, 1995and that were originally subject to declining-balance depreciation butare to be changed to straight-line depreciation in accordance withKorea's corporate tax law (alternative 2).
The report changes the assets' depreciation keys. It also checks theiroverall useful lives and reduces them in accordance with any specialdepreciation methods that may apply.
The report has two uses:

• It assigns a straight-line depreciation key to assets that have
previously been depreciated using a declining-balance key. It alsochecks their useful lives at the same time.

• It checks the useful lives of assets whose depreciation key has already
been changed. In this case, you must specify the same old and newdepreciation keys.
You must not carry out a live run of the report more than once for anyasset, because this can cause errors in them if their useful lives arechanged during the first run. However, this can only happen if youselect Ignore warnings (see below).

Features
The reports divides each asset's current net book value by itsacquisition and production cost (APC). It then compares this figure withthe official Korean tax table. The remaining useful life is calculatedas follows:
Net book value/APC>(1-depreciation factor)**1
The expired useful life is 1 year.
Net book value/APC>(1-depreciation factor)**2
The expired useful life is 2 years.
And so on.
The report compares this figure with the expired useful life recorded inthe asset master. If the latter is larger, the report suggests a newfigure for the overall useful life.

Selection


• Depreciation area


• Old depreciation key

Enter the depreciation key that is currently assigned to the assets.

• New depreciation key

Enter the depreciation key that is to be assigned to the assets. It mustbe a straight-line depreciation method.

• Test run

Prevents the report from changing any data.

• Ignore warnings

Allows the report to change assets whose original useful lives havealready changed.
Select this function only if you want to process assets whose usefullives have been changed independently of the changeover from thedeclining-balance to the straight-line method of depreciation. Beforeyou carry out a live run, you should carry out a test run.

Previous Versions of the Report
This report serves to replace report J_1KAC04, which was contained inprevious versions of the system. The new report offers new functions andworks in a slightly different way.
The new report simultaneously changes the assets' depreciation keys andchecks the useful lives. It also creates change documents.
The old report calculated a different useful life. In order to calculatethe depreciation properly, a conversion year was needed. In the newreport, however, you cannot enter a conversion year, because this causesproblems with the depreciation of the scrap value.