Hi,

We have this situation where we want to add the depreciation of machine to the cost of production, so that it can be add to COGS. Till this point it is normal, but we also want to use the Fixed assets module to keep track of the machines..

Now if we want to apply the depreciation from fixed assets, we can't add it to the COGS, also if we add the depreciation to the cost of manufacturing we can't trace the use of the machine.....

Also I think if we apply both methods there will be duplication in the depreciation expenses...

Any ideas ???

Hi Mohamed alsadr,

Actual depreciation every month should be booked as
Dr Depreciation expenses
Cr Accumulated depreciation

The depreciation absorption per production order should be booked as
Dr WIP
Cr FOH Control
This will later be closed into finished good inventory on conclusion of production
Later, when the goods are sold, it will be closed to COGS

Hence, there won't be any duplication

Rgds,
Paul