In this system, we have provisions for depreciation accounts for every type of Fixed Assets.
When we make a provision for depreciation for a type of asset (usually on monthly basis), we write the depreciation account name in column ACCOUNT-DEBIT and the provision for depreciation account name in column ACCOUNT-CREDIT.
The depreciation account in column ACCOUNT-DEBIT is a Profit & Loss account item. This item should have been zerorised in the earlier operation (See steps 4 and 5) when we zerorised Profit & Loss amounts.
Now we want to zerorise any credit amount in column RM-CREDIT where the corresponding item in column ACCOUNT-CREDIT is a provision for depreciation.
The number of amounts to be zerorised should not be many for each asset category. Usually, the rows for provisions transactions should be grouped adjacently together, so it is easier to identify the amounts. However, if this is not the case, we can use AutoFilter operation to identify the amounts.
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To use AutoFilter operation:
Make sure the data is in AutoFilter mode. Click on the arrow-head on the right of the cell which has data title ACCOUNT-CREDIT. A list will appear. Select a provision for depreciation account name. Once we identify the amounts, change all amounts in column RM-CREDIT to 0 (zero). Make sure you do not zerorise the current year provisions. Remove the AutoFilter mode once done.
You should already have a row for details for opening balance for each provision account. You did that when you first input the opening balances. In that row, replace the amount under column RM-CREDIT with the new accumulated provisions amount. You can get the new figure from the previous year's accounts.
Repeat the operation for each provision for depreciation account.
11. Zerorise the previous year's amounts other than provisions for depreciation
Sometimes, we make a provision for certain expense when we incur an expense but the bill has not come yet. Usually the number of provisions accounts is not many (around 8). Over time, some of the provisions will no longer be required (there will be a corresponding entry to reverse it). Now, we want to zerorise all amounts of provisions no longer required and leave only provisions we still require intact.
We will zerorise the amounts of one provision account at a time. To do this, we need to select rows where column ACCOUNT CREDIT contain a provision account and also rows where column ACCOUNT-DEBIT has the same account name. However it is not necessary that the account's name appear in the same row.
Since we will look for the items in 2 different columns, we will use AdvanceFilter operation. Here are the steps:
1. Set a criteria (in the sheet Criteria) as shown here:
A B 1 ACCOUNT-DEBIT ACCOUNT-CREDIT 2 PROV-WATER 3 PROV-WATER 4
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This criteria block read that we want to select rows where there is item PROV-WATER in the column ACCOUNT-DEBIT and also select rows where there is the same item in column ACCOUNT CREDIT (not necessarily in the same row).
2. Activate the sheet where our data reside (sheet DATA).
3. Make sure the active cell is not a blank cell and is inside the data area.
4. Click menu Data/Filter/Advance Filter to open the Advance Filter dialog box.
5. The List range box is automatically filled with the address of the data area. Check that it is correct, otherwise you have to correct your data area.
6. Fill the Criteria range box with the address of the criteria you set above. (To easily fill the box with the address, follow these steps: Make sure the insertion bar is already in the box. Click on the tab of the sheet where the criteria reside. Highlight the criteria block. You will notice that as you highlight the criteria block, the Criteria Range box is automatically filled with the address of the criteria block).
7. Click OK.
8. Now you should see only rows containing transactions involving the account you set in the criteria block.
9. Zerorise amounts in columns RM-DEBIT and RM-CREDIT where the amounts matched (or reversed). (If a particular credit entry is reversed, replace amounts in the columns RM-CREDIT and RM-DEBIT with zero). Don't delete the rows because its corresponding entry may involve another account, which we still want to appear. (Make sure you do not zerorise the current year's provisions.)
10. Repeat the process with other provisions accounts (if any).
(This process will leave provisions amounts we still require intact).
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If you want to avoid this process from the earliest possible chance, you can remove the row of the provisions entry when it becomes reversible, without making entry to reverse it. However, this way, you are unable to trace the history of the transactions.
Provisions for bad/doubtful debts can be handled as above.
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