Version 1.0
Prepared by: @Lorraine Sebata
Approved by: @
Review date: 2025-08-20
Next review date: 2026-08-20
This SOP applies to the Accountant and the Chief Financial Officer (CFO).
To define the systematic process and controls for computing and recording the monthly depreciation expense of fixed assets, ensuring adherence to the Fixed Asset Depreciation Policy (FIN-006).
This SOP applies to the Accountant and the Chief Financial Officer (CFO).
Fixed Asset Capitalization Policy (FIN-005)
Fixed Asset Depreciation Policy (FIN-006)
Financial Department (Accountant): Responsible for all calculation, preparation, review, and posting of the monthly depreciation journal voucher.
Chief Financial Officer (CFO): Responsible for reviewing and approving the monthly depreciation calculation and the final journal voucher.
The calculation and posting of depreciation must be performed on the last working day of each month.
Step | Action | Responsible Party | Documentation / Notes |
5.1 | Calculate Depreciation | Accountant | Calculates the depreciation expense for all capitalized assets based on: Asset Category, Depreciation Rate (from FIN-006), and Asset Historical Cost. |
5.2 | Prepare Calculation Sheet | Accountant | Prints out the depreciation calculation sheet and signs it for certification. |
5.3 | Review and Approval (CFO) | Accountant & CFO | Submits the signed calculation sheet to the CFO for review. The CFO reviews the sheet, signs it, and returns it to the Accountant. |
5.4 | Prepare Journal Voucher | Accountant | Prepares the monthly Depreciation Journal Voucher based on the approved calculation sheet. |
5.5 | Pre-Posting Review | Accountant | Reviews the Journal Voucher to ensure: 1. All fixed assets are included, and 2. Depreciation rates comply with the authorized rates defined in Policy FIN-006. |
5.6 | CFO Notification | Accountant | Notifies the CFO to review the final journal voucher before it is posted to the General Ledger. |
5.7 | Posting to General Ledger | Accountant | Posts the journal voucher to the General Ledger. The standard entry is: Debit Depreciation Expense / Credit Accumulated Depreciation. |
5.8 | Final Submission and Filing | Accountant & CFO | Submits the final posted journal, attached with the signed calculation sheet, to the CFO for final review and sign-off. The Accountant then files the complete voucher package in the journal vouchers file. |
This SOP will be reviewed annually by the Finance Department to ensure continued accuracy and adherence to the Fixed Asset Depreciation Policy.