Fixed Assets are added to the Asset Register as they are acquired or at a minimum, at the end of a fiscal period. At the end of a fiscal period or year, any assets that are lost, sold, or destroyed are updated or retired. The remaining assets are then included in a depreciation forecast and, once validated, a depreciation batch is run.
Fixed asset Journal Entries are automatically generated to account for retirement and depreciation changes in the general ledger, and should be approved and posted after being reviewed. For any Addition or Additional asset transactions, journal entries will need to be generated manually, before being approved and posted.
The GL Distribution of a fixed asset journal entry is determined by your Fixed Asset configuration and the configuration of the Asset Major or Minor Group assigned to each asset. See Fixed Assets Configuration for more information about setting up the components used in the fixed asset processes.
In this article:
- Fixed Assets Navigation Glossary
-
Add or Import Fixed Assets
-
Revalue or Change the Life of a Fixed Asset
- Retire or Depreciate Assets
- Fixed Asset Journal Entries
- Fixed Asset Reporting
- Fixed Asset Access Privileges and Security
Fixed Assets Navigation Glossary
The following list of pages and windows will be used to manage your Fixed Assets:
- Asset Register: Used to add new assets, and to review or edit existing assets.
- Asset Transaction Inquiry: Used to review and report asset transactions by Date, Major, Minor, Class and other filters.
- Asset Transactions: Used to generate, review and post Asset Transaction batches, and create Depreciation Forecasts (an alternative is to use the Depreciation Forecast option below).
- Journal Entries - Fixed Assets: Used to generate manual Fixed Asset journal entries, or review, approve and post automatically generated Fixed Asset journal entries.
- Asset Imports: Used to create and review Asset Import batches.
- Asset Activity: Used to run the Asset Activity report.
- Depreciation Forecast: Used to review the depreciation forecast after a Depreciation Forecast batch has been run.
Add or Import Fixed Assets
Add an asset to your Asset Register to record the asset. Adding an asset creates an Addition transaction against the asset. Generate an additional journal to create the journal details according to your configuration.
Assets can be added using the following methods:
This method is usually used for adding a small number of assets, which have not been purchased through the Accounts Payable process (a Payables Voucher does not exist for the asset).
- Navigate to the Asset Register page and click Add. The Add Asset Register window opens.
- Enter the information about the asset. These fields are required:
- Code: This can be changed but will usually be the next number in sequence.
- Description: The description of the asset.
- Type: Determines if a journal entry is generated when an asset transaction is posted and the GL Distribution for any journal entries generated. The following choices are available:
- Capitalized: Asset transactions will generate journal entries.
- In Progress: Asset transaction will generate journal entries, however assets will usually not be marked to depreciate until the work is done and the asset has been capitalized. See the Depreciable checkbox in Step 6 for more information.
- Expensed: Asset transactions will not generate journal entries as it is assumed the asset has been fully accounted.
- Major: Choose the major grouping. This is used for reporting purposes and to determine GL distribution for various transactions.
- Minor: Choose the minor grouping. This is used for reporting purposes and to determine GL distribution for various transactions and custom fields for the asset.
- Status: Defaults to Active but can be used to mark an asset as Inactive.
- Inventory Item: Select an existing inventory item if an asset is to be linked to an inventory item. This link is used for reporting purposes only.
- Acquired On: The date the asset was acquired. This is used for reporting purposes only.
- Acquired Cost: The cost of the asset when acquired. This is used for reporting purposes only.
- Enter other information as needed. These fields are optional and used for reporting purposes only:
- Supplier: Choose the supplier account from the list or add the record if necessary.
- Manufacturer: Enter the manufacturer of the asset.
- Model: Enter the model name or code of the asset.
- Serial #: Enter the serial number of the asset.
- Barcode/RFID#: Enter the barcode or RFID number of the asset.
- Class: Choose the asset class.
- Quantity: Enter the number of assets. Assets that need not be individually identified can be entered and managed in bulk. For example, the quantity can be set at one if the bulk number of assets is mentioned in the description.
- Department: Choose the department responsible for the asset.
- Management Report Code: Choose a management report code.
- Space: Choose the space where the asset is normally stored.
- Update any additional information on the Additional Information tab. An image of the asset can be added on this tab for identification.
- Click Save. Other tabs become available after the record has been saved.
- In the Depreciation tab, enter book and depreciation details:
- Book: The General Ledger book (000) record is created by default. Click the link to view and select other available books. For example, a Fair Market book record can be used to store values for insurance purposes.
- Depreciable: Check the box to include the asset in depreciation batches and calculations. An asset saved as an In Progress type will not normally be marked to depreciate until the work is done and the asset has been capitalized. Expensed type assets cannot be depreciated.
- Depreciation Method: This is often a straight line, but various declining balance options are available. Choose the depreciation method to use:
- Straight Line: Divides the cost of an asset equally among each period of the asset's useful life.
- 200% Declining Balance: An accelerated depreciation method that expenses depreciation at double the normal rate.
- 150% Declining Balance: An accelerated depreciation method that expenses depreciation at 1.5 times the normal rate.
- 125% Declining Balance: An accelerated depreciation method that expenses depreciation at 1.25 times the normal rate.
- Declining Balance Pct: This option allows you to choose your own Declining Balance percentage. After selecting this option, the Depreciation % field will become editable for you to add your preferred percentage. You may need to add the Depreciation % field to your layout.
- Custom: If choosing a custom schedule, set up the schedule under Tools > Custom Depreciation Schedule.
- In-Service Date: Enter the date the asset is considered to be in service. This is also the date from which depreciation will be calculated.
- Life Years: Enter the life of the asset in years.
- Life Months: If the life of the asset is not in full years, enter the additional months for the life of the asset.
- Convention: Choose the convention for how to commence depreciation. A common choice is Mid-Month, however the full list of is listed below.
- Full Month: Calculate a full month of depreciation in the first transaction.
- Full Year: Calculate a full year of depreciation in the first transaction.
- Half Year: Calculate half a year of depreciation in the first transaction.
- Mid-Month: Calculate the first transaction on a daily basis according to the in-service date.
- Next Month: Begin depreciation next month.
- Next Year: Begin depreciation next year.
- Last Depreciated: This field will be updated when posting depreciation transactions. For assets that have already been depreciated in another system, enter the last depreciated date to indicate when the next depreciation transaction will be calculated.
- Book Value: The initial book value or cost value of the asset. A change to this field will create an additional transaction for the asset. Journal entries can be generated based on your configuration for asset transactions.
- Accumulated Depreciation: The accumulated depreciation amount for this asset. A change to this field will create an additional transaction for the asset. Journal entries can be generated based on your configuration for asset transactions.
- Net Book Value: Cannot be edited, this is a calculation of Book Value less Accumulated Depreciation.
- Salvage Value: Enter the value to indicate to the net book value an item should reach, before it is no longer depreciated.
- Switch to Straight-Line: At any time during the life of the asset, check this box to switch to straight-line depreciation from another schedule.
- Update other tabs as necessary.
- Components: Manage component assets for a master asset.
- Documents: Add any documents associated with the asset.
- Job Profiles: Add a job profile to be used for asset maintenance.
- Notes: Add notes to keep track of any details not already listed on the asset.
- If User Defined Fields (UDFs) have been configured for the Minor, an additional tab will be displayed. Complete the UDFs as necessary.
- Click Save.
- See Fixed Asset Journal Entries for information about how to generate any journals associated with Addition transactions.
Assets can be imported to your Asset Register from a file rather than adding one at a time. Usually, this is a part of opening balance loads or when assets are acquired in a large quantity. Prior to importing, ensure the import format matches the format of the asset data in the software.
Rules around the data for asset imports are:
- The import file must be in a CSV format, regardless of the delimiters set at the import format area.
- Code imports (Major, Minor, New, and so on) are case-sensitive. They must be capitalized.
- The minimum required fields are:
- Description: Required to post.
- Major: Required to import.
- Asset Exists: Will throw an error and default to N (No).
- Own/Lease: Will throw an error and default to O (Own).
- Type: Will throw an error and default to C (Capitalized).
- Life: Required to post.
- All other available fields can be added to the import format to match the data available in the external file.
- Note: If there is a requirement to import data into the Book Value or Type fields, these will be found in the import format as Asset Cost Basis and Asset Scope, respectively.
- See Fixed Assets Configuration for more information about configuring the Import Format.
To Import Assets from a file:
- Navigate to the Asset Imports page and click Tools > Import Assets.
- In the Format Field dropdown, select the format you require.
- Click Choose Files to find and select the import file.
- Click OK. A successful import will open the Edit Asset Import Batch window. The batch is available in Asset Imports until it is posted or deleted.
- Right-click and select Edit to see the details which will be added to the asset register. See Edit an Asset Import Batch prior to posting, if changes are required.
- When all details are complete, right-click single or multiple records and click Tools > Post.
- When all records are processed (Posted, Deleted, or Closed), the batch will be marked as Posted.
- See Fixed Asset Journal Entries for information on how to generate any journals associated with Addition transactions.
File Import Troubleshooting:
- Acquisition Cost will not update the Book Value of an imported asset; import the cost into both fields for accurate records. If importing with accumulated depreciation, also import the Depreciation date to ensure this is handled accurately.
- Excel can store dates incorrectly. To change a date to text in the proper format, insert a column and use the formula:
=TEXT (B5, "DD/MM/YYYY")
where B5 is the original date field. - Copy all results and paste values to replace formulas.
- Delete non-asset data and the headings from the spreadsheet.
- After saving and closing the file, open it in Notepad or another text editor and check for blank rows at the bottom. To avoid errors, remove the blank rows if any.
- Ensure the columns are in the same order as the import fields in the software.
- If in doubt, contact the Support Team.
- Navigate to the Asset Imports page and click Add. The Add Asset Import Batch window opens.
- Enter the following information:
- Description: an appropriate description for the import batch.
- Date: Enter the date for the batch. Normally this is the end of the fiscal period.
- End Date: Enter the end date. This is the filter to include all voucher details date prior to and including this date.
- Source: Select Accounts Payable.
- Click Save.
- Click Generate at the top of the window. One asset record will display for each voucher line coded to Asset Cost Clearing.
- Right-click on a line and select Edit to view or edit the details that will be added to the asset register. See Edit an Asset Import Batch prior to posting if changes are required.
- When satisfied with the details, right-click single or multiple records and click Tools > Post.
- When all records are processed (Posted, Deleted, or Closed), the Batch will be marked as Posted.
- See Fixed Asset Journal Entries for information about how to generate any journals associated with Addition transactions.
- To consolidate into a single asset, select multiple assets. Right-click and select Tools > Consolidate.
- To revert to individual assets, select a consolidated asset. Right-click and select Tools > Undo Consolidate.
- To split the asset into multiple assets and mark the original as split, select a single asset. Right-click and select Tools > Split.
- To revert to a single asset, select the split asset. Right-click and select Tools > Undo Split.
- Retain the record of an asset included in the file, but mark it as Closed and exclude it from being imported. To close, select the asset. Right-click and select Tools > Close.
- To edit specific fields for multiple assets at the same time, multi-select assets. Right-click and use Edit Multiple.
Revalue or Change the Life of a Fixed Asset
Revalue an Asset
Revaluing or changing the book value of an asset will also record an Addition transaction against the asset and a journal can be generated according to your configuration.
To Revalue an Asset:
- Navigate to the Asset Register page and find the asset to be updated.
- Right-click on the asset and select Edit. The Edit Asset Register window opens.
- In the Depreciation tab, edit the Book Value field, as required.
- Click Save. An Additional transaction will be created for any changes that have effected the book value of the asset.
- See Fixed Asset Journal Entries for information about how to generate any journals associated with Additional transactions.
Change the Life of an Asset
When an asset's useful life is incorrect or has changed, it is possible to update the asset's Life Years and Life Months fields.
To change the life of an asset:
- Navigate to the Asset Register page and search for the asset.
- Right-click on the asset and select Edit. The Edit Asset Register window opens.
- In the Depreciation tab, change the Life Years and Life Months fields, as required.
- Click Save. The Select Recalculation Period window opens.
- Select the period for which you would like to recalculate the depreciation.
- Life: Will recalculate the depreciation across total the life of the asset.
- Current Year: Will recalculate the depreciation only across the periods of the current year.
- Forward: Will recalculate the depreciation across all future periods.
- Click OK. The Recalculate Depreciation Schedule Status window will open and display the change results.
- Click OK. You return to the Edit Asset Register.
- Click OK. An Additional transaction will be created for any changes which have effected the life of the asset. Depending on the changes, the schedule may also be recalculated.
- See Fixed Asset Journal Entries for information about how to generate any journals associated with Additional transactions.
Retire or Depreciate Fixed Assets
Retire Assets
When an asset is no longer useful, productive, or valuable, it can be retired from the books. Add an asset retirement transaction and record further information such as the reason and any expenses or proceeds.
Once posted, a fixed asset journal is automatically created with the journal details for these transactions, according to your configuration. Refer to Major or Minor Asset Groups for information about the GL distribution transaction types and the GL coding.
To retire an asset:
- Navigate to the Asset Transactions page and click Add. The Add Asset Transaction window opens.
- Enter a description for the batch and select the date.
- Click the drop-down for Type and choose Retirement.
- Click Save.
- At the top of the window, click Add Details.
- Add the details for the retirement of a specific asset:
- Batch Detail Type: Choose the type that best suits the reason for the transaction.
- Date: Enter the date of the transaction.
- Asset: Choose the asset to retire from the drop-down.
- Description: Enter a description for the transaction.
- Reference: Enter a reference for the transaction.
- Proceeds: Enter any proceeds received for a sold asset.
- Expenses: Enter any expenses incurred during the retirement of the asset.
- Quantity: This field is available to update when the asset being retired has a quantity of more than one on the Asset register. The total quantity of the asset will be reduced by the retired asset quantity. Assets with a quantity of one will be retired in this single transaction.
- Cost: The book value from the asset register will be displayed. If the quantity is more than one, this field is editable. Enter the cost to reduce the asset register record by.
- Click OK.
- To retire additional assets, click Add Details and add each asset to be retired.
- After all records have been entered, click Tools > Post to finalize the batch.
- Retirement transactions will be created for the assets and the assets will be updated with the details, including a status of Retired. Journal Entries are automatically created. See Fixed Asset Journal Entries below for more details.
Forecast Fixed Asset Depreciation
A Depreciation Forecast batch is used to calculate and forecast depreciation expense for a selected period. Once posted, a depreciation forecast batch does not create transactions against the asset, therefore there are no associated journal entries.
To create a depreciation forecast:
- Navigate to the Asset Transactions page and click Add. The Add Asset Transactions window opens.
- Update the following fields:
- Description: Enter a description for the batch, if required.
- Date: Enter the date for the batch. Normally this is the end of the current fiscal period.
- Type: Choose Depreciation Forecast.
- Click Save. The depreciation forecast batch is saved with a batch number.
- Click Tools > Generate.
- Enter the filter details to choose which assets to include:
- Book: Choose which book to depreciate the values of assets. Only the General Ledger book transactions will be available to generate journal entries.
- Depreciate By: Select to filter by Major or Asset. To include all assets, select either option but do not select the next filter:
- Major: If Depreciate By is set to Major, select which Major groups to include in the transactions. To depreciate all, do not choose any groups.
- Asset: If Depreciate By is set to Asset, select which assets to include in the transactions. To depreciate all, do not choose any groups.
- Through: Enter the end date for depreciation calculations. Note that this will generate transactions up to this date. If an asset included has not been depreciated in the last 6 months, 6 months of depreciation will be calculated in the batch for this asset.
- Click Depreciate. A confirmation message shows.
- Click Continue to confirm the selection. The transaction details will show in the batch.
- View the Asset Transaction Details, if necessary.
- Click Tools > Post to finalize the batch. The batch will be marked as posted and will not create transactions against the assets.
Depreciate Fixed Assets
A depreciation batch can be processed at the end of a fiscal period to create depreciation transactions against assets. Once the batch is posted, a depreciation Journal Entry will be generated automatically.
The GL distribution of the journal entry detail will be based on your Major and Minor Asset Group configuration. Refer to Major or Minor Asset Groups for information about the GL distribution transaction types and the pairing for depreciation.
To depreciate assets:
- Navigate to the Asset Transactions page and click Add. The Add Asset Transactions window opens.
- Update the following fields:
- Description: Enter a description for the batch, if required.
- Date: Enter the date for the batch. Normally this is the end of the current fiscal period.
- Type: Choose Depreciation.
- Click Save. The depreciation batch is saved with a batch number.
- Click Tools > Generate.
- Enter the filter details to choose which assets to include:
- Book: Choose which book to depreciate the values of assets. Only the General Ledger book transactions will be available to generate journal entries.
- Depreciate By: Select to filter by Major or Asset. To include all assets, either option will suffice but do not select the next filter:
- Major: If Depreciate By is set to Major, select which Major groups to include in the transactions. To depreciate all, do not choose any groups.
- Asset: If Depreciate By is set to Asset, select which assets to include in the transactions. To depreciate all, do not choose any groups.
- Through: Enter the end date for depreciation calculations. Note, that this will generate transactions up to this date. If an asset included has not been depreciated in the last 6 months, 6 months of depreciation will be calculated in this batch for this asset.
- Click Depreciate. A confirmation message shows.
- Click Continue to confirm the selection. The transaction details will show in the batch.
- View the Asset Transaction Details, if necessary.
- Click Tools, and Post to finalize the batch and create the transactions against the assets. Journal entries will be automatically created with a New status, and should be approved and posted.
Fixed Asset Journal Entries
To record the financial side of asset depreciation in the general ledger, journal entries are generated automatically when a depreciation or retirement batch is Posted.
Journal entries which have been automatically created will only need to be reviewed, approved and posted (steps 6-9 below). These automatically created journal entries can be found in relevant period on the Journal Entries: Fixed Asset page. For cases where an asset batch does not result in positive debits or credits (for example, all assets contain no value), a journal entry will not be created.
You may also want to create journal entry when making a change to an existing Fixed Asset, or at the end of the fiscal period to check for any asset transactions that have not yet been transferred to the GL.
Details for the journals are determined by the configuration of GL distribution for various transactions at the Asset Major or Minor Groups. Journal entries can be generated specifically for Addition, Depreciation or All transactions.
To add a journal entry for fixed asset transactions:
- Navigate to the Journal Entries: Fixed Asset page and click Add. If the journal is being added from the Journal Entries page not specific to Fixed Assets, select the GL Source of Fixed Assets.
- Enter the journal header information:
- Description: Type a description for the entry.
- Year: Period: Select the correct fiscal period.
- Transaction Date: Select the correct journal date.
- In the Advanced section, choose the details of asset transactions to use for the journal generation:
- Distribution Type: Choose whether to include only Addition or Depreciation transactions or include all asset transactions.
- Period End Date: Enter the period end date as the end date to filter transactions. Normally this is the same as the batch header transaction date.
- Batch: Select a specific batch or leave it blank to include all transactions.
- Click Save. The Journal Entry is created with a Journal Entry number.
- Click Tools > Generate Journal Entry. The Journal Entry Detail section will be populated with the journal details.
- In the Edit Journal Entry window, review the details.
- Click Tools > Approve Journal Entry to approve the journal entry for posting.
- Click Tools > Post Journal Entry to post the entry to the general ledger.
- Click OK. The appropriate GL Account balances will be updated.
Troubleshooting Fixed Asset Journal Entries
- When a journal entry is generated, it will be based on Asset transactions that have not yet been flagged as G/L Posted = Yes. Part of the journal generation process is to update this flag for included transactions. Therefore, this flag must be reversed to delete the journal entry.
- To remove the journal entry detail and return the flag for the transactions to G/L Posted = No:
- Click Tools > Undo.
- Delete the batch or update the filters and generate the details again.
- Journal entry details will be based on the GL distribution at the Asset Minor. If this has not been defined, it will use the details on the Asset Major.
Fixed Asset Reporting
Report on Assets using the Asset Activity report or on-screen reporting.
On-screen reporting, with a customized view, will display current figures. This creates a dynamic report which can be used to drill down into grouping levels or to view an individual asset’s details.
To report on assets on-screen:
- Navigate to the Asset Register page.
- Enter any filters (To show the financial figures, the most commonly used filter in the Status = Active, in the Book = General Ledger)
- Click Search.
- You may wish to sort and group assets on Major and Minor and include subtotals for each grouping level and a grand total for Book Value, Accumulated Depreciation, and Net Book Value.
- Once you have the required reporting results, right-click on the header of the grid and export to your preferred format.
An Asset Activity report is run for a selected date range. This will give historical data and provide a summary of the movement of assets.
To run the Asset Activity report:
- Navigate to Asset Activity.
- Choose the report format. Consider the purpose of this report and if compared to the General Ledger, group accordingly to show matching balances.
- Date Range: Enter the start and end dates to control both the beginning balance of assets and the transactions to be included in the report.
- Book: Consider the purpose of this report. To confirm sub-ledger/general ledger balances, choose the General Ledger book. To report on another book of values, choose the appropriate record for that book.
- Click OK. The report will open and can then be saved, exported or sent by email.
Fixed Asset Access Privileges and Security
The following Access Privileges are available to restrict certain roles or users from carrying out certain actions within the Fixed Asset module:
Allow Deletion of Fixed Assets
This security option controls the ability to delete Fixed Assets. Any user assigned to this option will be allowed to delete Fixed Assets. If no users are assigned to this option, it is considered inactive and ALL users can delete Fixed Assets.
Allow Depreciation of Assets
This security option controls the ability to depreciate Fixed Assets via the Depreciate Assets process. Any user assigned to this option will be allowed to depreciate Fixed Assets. If no users are assigned to this option, it is considered inactive and ALL users can depreciate Fixed Assets.
Allow Edit of Depreciated Asset Book Details
This security option controls the ability to modify depreciation book details for depreciated Fixed Assets. Any user assigned to this option will be allowed to modify the depreciation book details for depreciated Fixed Assets. If no users are assigned to this option, it is considered inactive and ALL users can modify depreciation book details for depreciated Fixed Assets.
Allow Edit/Add of Fixed Assets
This security option controls the ability to add/modify Fixed Assets. Any user assigned to this option will be allowed to add/modify Fixed Assets. If no users are assigned to this option, it is considered inactive and ALL users can add/modify Fixed Assets.
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