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Generally, depreciation is continuous and reflects expected wear and tear to fixed assets.
Reassessment
Periodically, business re-assesses their fixed assets for impairment. Over time, an asset's book value may become lower than the current market value (CMV) at which the asset could be sold, for instance due to unexpected damages. In some cases, the CMV of a specific asset may become higher than the book value. This means that its value on the balance sheet must be adjusted accordingly. In some countries, an organization cannot selectively apply revaluation to individual fixed assets. Instead, it must be applied to entire asset classes.
To register the results of reassessment, you can use the Changes of Fixed Asset Parameters document. Here, you can enter the revised Gross Cost, Salvage Value, and Useful Life.
Conservations
Fixed assets may need some preventive maintenance works to prevent damage or emergency repair over their useful lives. If the works require idle time measured in financial periods, you can initiate conservation of the fixed assets. Also, it may happen that you won't need to use specific assets some time for some reasons.
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The fixed asset, once conservation is cancelled, will be depreciated. The duration of useful life is not changed, however, it is just divided into the interval before conservation and the interval after cancellation of this conservation. The depreciation calculation will be resumed. For more information, refer to Conservations of Fixed Assets.
Capital Improvements
If you decide to make capital improvements to a fixed asset, that is, to replace the significant parts with parts with higher efficiency characteristics or perform other essential works, necessity to place the asset in conservation may depend on how long the fixed asset will be out of use.
Generally, improvements could extend the useful life and increase the gross cost of the asset. You can record the costs of improvements using various documents - you only need to associate record these costs to the Capital Improvements GL account and associate them with particular fixed asset specified selected as costs cost object. Then, you can capitalize the costs of these improvements and register changes in other parameters by creating a Capital Improvements to Fixed Assets document. For details, refer to Capital Improvements to Fixed Assets.
Also, in this document you can calculate the current depreciation using the "old" parameters if needed. If the asset was in conservation during the capital improvement works, you will need to cancel the conservation once the works are completed. After that, you will be able to calculate depreciation with the revised parameters resulted from capital improvements made to the asset.
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For more information on details, refer to Asset Management: Reports.