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Fixed Assets

The document outlines the procedures for managing fixed assets, including activation, depreciation setup, account determination, and asset acquisition. It details various depreciation methods, asset classes, and the processes for capitalization, depreciation runs, and asset retirement. Additionally, it covers fixed asset revaluation and the corresponding general ledger account determinations.

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MS Lumber
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13 views12 pages

Fixed Assets

The document outlines the procedures for managing fixed assets, including activation, depreciation setup, account determination, and asset acquisition. It details various depreciation methods, asset classes, and the processes for capitalization, depreciation runs, and asset retirement. Additionally, it covers fixed asset revaluation and the corresponding general ledger account determinations.

Uploaded by

MS Lumber
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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FIXED ASSETS

1- Activate Fixed Assets


2- Depreciation Area- Setup
3- Depreciation Type- Setup
4- Account Determination
5- Asset Class-Setup
6- Asset Master Data
7- Acquisition & Capitalization of Asset
8- Depreciation Run
9- Retirement/Disposal
1- ACTIVATE FIXED ASSETS

• Administration  System initialization  Company detail  Tick Fixed Assets

Calculate depreciation by – Month or Day (As Per GAAP its Month)


Now you can see a new fixed asset folder under Financial
Fixed Assets
a) Asset Mater Data
b) Capitalization (If we are not going to use an A/P documents
c) Capitalization Credit Memo ( If we are not going to use A/P credit Memo)
d) Retirement (If we are not using A/R invoice to sell it)
e) Transfer
f) Manual Depreciation
g) Depreciation Run
h) Asset Revaluation
i) Fiscal Year Change
2- DEPRECIATION AREA- SETUP

• Administration  Setup Financial  Fixed Assets DEPRECIATION AREA


a) Main depreciation Area (IAS/IFRS) Only depreciation area that is posted to G/L Ledgers.
b) Addition areas ( e.g. internal area additional area, Tax addition area, GAAP addition
area)

Additional areas will do just reporting for you but Main


depreciation area will do posting in G/L .
Posting of Depreciation
1- Direct (directly charged to Fixed Assets Accounts)
2- Indirect (Charged to Accumulated Depreciation Account)
Posting of Retirement: Gross/Net
3- DEPRECIATION TYPE- SETUP
• Administration  Setup Financial  Fixed Assets  DEPRECIATION TYPE
• No depreciation
• Straight Line- A method of distributing an asset value evenly over its useful life. i.e. the
asset is depreciated by the same amount in each period.
• Declining Basis- The declining balance method is a good depreciation method for assets that quickly
lose their value or become obsolete, like computer equipment and other technology that has more utility
in the earlier years of their life
• Multi levels- A method of applying different depreciations rates to assets for different
stages of an Asset’s useful life.
• Immediate Write-Off- A method generally applied to low value assets whose full value can be
depreciated in the year of acquisition.

CREATE A NEW DEPRECIATION AREA: COMPUTERS & PRINTERS


Code: Comp_Prnt Description: Computers & Printers Method: Straight Line
Calculation Base: Monthly Calculation Method: Net Book Value/ Remaining Life
Include Salvage Value in Depreciation Calculation
4- ACCOUNT DETERMINATION

• Administration  Setup  Financial  Fixed Assets  Account Determination


• Load Previous Data & Duplicate
• Code: Comp & Prnt Description: Computers &
Printers

Change Four Account Code Determinations


1- Asset Balance Sheet Account  Link to Computers & Hardwares Asset G/L Account
2- Acquisition Clearing A/c  Link to Computers & Printers Asset clearing G/L Account
3- Ordinary Depreciation Account  Link to Computers & Printers Depreciation G/L
Account
4- Accumulated Ordinary Depreciation  Link to Computers & Printers Accumulated
Depreciation G/L Account.
5- ASSET CLASS-SETUP

• Administration  Setup  Financials  Fixed Assets  Asset Class

Define New Asset Class


• Code- Comp_Prnt
• Description: Computers & Printers
• Asset Type: General

• Depreciation Area: IAS/IFRS


• Account Determination: Comp & Prnt
• Useful Life (Months): 36

• NOW YOU ARE READY TO CREATE ASSET MASTER DATA


6- ASSET MASTER DATA
• Financial  Fixed Assets  Asset Master Data
• Cntrl A to create new Mast Data. (Computer System)
• Item # C001, Description; Computer System 001
• Asset Class (Asset Data Tab): Comp & Prnt
• Tick Sales Items (If you are going to sell it later on)
& ADD
7- ACQUISITION OF ASSET
• Purchasing A/P – A/P Invoice – Select Vendor- Load Item: Computer System 001-
• Put Price: 4500 – Apply tax-
• Posting Date 05-01-16 & ADD (This will going to make 2 transactions)
Load Data Previous Record: Accounting- we can see journal entry(It will post to
Fixed Asset clearing Account)

After this Entry system will automatically create Capitalization


Documents.
CAPITALIZATION

• Financial  Fixed Assets  Capitalization  Load Previous Data-


Accounting-Capitalization

• Return to Master Data-Load Recent Entry- Accounting


Date Of Capitalization
Ordinary Depreciation
Carrying Value
Value Tab
8- DEPRECIATION RUN
• Financial  Asset  Depreciation Run
• Select Period from (Depreciated to) , Preview & Execute.
TO LOOK AT THE IMPACT
FINANCIAL  JOURNAL ENTRY DEPN TO ACC DEPN.

You can also Manually depreciate


Again look at Master Data– Fixed Assets
9- RETIREMENT
• Sales A/R- A/R Invoice- Select Vendor- Select Item- Sold for 3500 & Add
• Preview Accounting
• Like Capitalization System will generate a Retirement Document Automatically
• Financial  Fixed Asset Retirement- Load Previous Data– Accounting- Retirement

G/L Account Determination:


1. Fixed Asset Retirement Expense: 64…. Revenue Clearing A/c
2. Fixed Asset Retirement Revenue: 44…. Revenue A/c- for Retirement
3. Leave with Expense: 64…. NBV Retirement Expense
4. Leave with Revenue: 44…. NBV Retirement Revenues
FIXED ASSET REVALUATION
• Asset revaluation is a technique used to revaluate a company’s assets to take
into account inflation or changes in value since the assets were acquired
• OR to reflect M.V of asset.

G/L Account determination.


• Revaluation Reserves: 195…. Supplementary
Capital
• Revaluation Reserve Clearing: 641…. Supp. Capital
Clearing A/c-

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