General information
The module gives an opportunity to manage the assets of the company through:
- documenting the purchase of assets and opening records for them
- calculating an asset`s deprecation and recording it in the ledger
- increase the value of the assets
- recording its partial or total sale/disposal
- performing revaluation of an asset
- generating reports that provide information on the company`s fixed assets.
Priority maintains two parallel records for tracking the depreciation of assets in accordance with generally accepted accounting principles:
- deprecation for accounting purposes
- deprecation for tax purposes
Priority supports
deprecation by the straight- line method, non-linear decreasing(accelerating) method and custom
method set by the user.
Settings
Accounts
In the Chart of Accounts define the following GL accounts:
- an asset account
- an accumulated deprecation account
- a depreciation expense account
- a capital gains account
Groups
Fixed
asset groups include assets that share the same depreciation attributes and GL
accounts. An asset is assigned to a group when recorded in the system.
By default, the deprecation is calculated on a daily basis,
because of that the deprecation value of January will be more than that for
February. For each group the calculation might be changed
on a monthly basis. When the deprecation is calculated on a monthly basis, the
values will be the same every month and the deprecation will start from the
month after the purchase of the asset till the month before the sale of the asset.
Go to Financials->Fixed
Assets->Fixed Assets Attributes->Fixed Asset Groups and fill in:
o
Main Tab
§ Asset Group – group code
§ Group Description
o
Depreciation
- Acc’ting – deprecation attributes for accounting purposes
§ % Depreciation – deprecation
% by straight- line method
§ % Accelerated Depreciation – deprecation % by accelerated method
§ Years of Accelerated Depreciation – number of
years for deprecation by accelerated method
§ Months of Accelerated Depreciation – number of months for deprecation by accelerated method
o
Depreciation
– Tax – deprecation attributes for tax purposes
o
Misc.
§ Month Based Depr. – if the field is checked, the
deprecation for accounting purposes will be calculated on a monthly basis
instead of a daily
§ Month Based Depr.-Tax- if
the field is checked, the deprecation for tax purposes will be calculated on a
monthly basis instead of a daily
o
Acct Defs
– specify the default accounts for the group
§ Asset Account
§ Accumulated Depreciation Account
§ Depreciation Expense Account
§ Capital Gains Account
§ Revaluation Reserve Account – an account, that
will be credited when the asset of the group increases its value after
revaluation
§ Revaluation Impairment Account – an account,
that will be debited when the asset of the group decreases its value
In the Fixed
Asset Groups form there are two direct activations, which
can be used to update the attributes of assets in the group:
o
Revise
Deprec for Asset Group – used
when changing group depreciation attributes. On execution the changed
attributes will be reflected in the assets of the group.
o
Update
Accts for Assets in Group – used
when changing accounts. On execution the changed accounts will be
reflected in the assets of the group.
Operations with assets
How to manually create an asset?
Go to Financials
-> Fixed Assets -> Fixed Assets and enter the following information:
o
Main Tab
§ Purchase Data – purchase date of an asset
§ Asset Number – Fills automatically, but can be
revised
§ Desc. Of Asset – brief description of the asset
§ Asset Group- choose the asset group
§ Purchase Price
o
Details
§ Category – asset category (if
categories are defined)
§ Location – location of an asset (if locations are defined)
§ Branch – branch/commercial center
where the asset is registered (if this functionality is used)
§ Details – additional information about the
asset
§ Effect Date – starting date of the deprecation
calculation
§ Payment Date – date when the purchase of the
asset is paid
§ Accting/Tax Only – choose it the asset is recorded for accounting
or for tax purposes only. By default, the field is empty and the
deprecation will be calculated for both of them
o
Purchase
§ Type of purchase invoice - type of purchase invoice of the
asset
§ Internal Inv. (Purch) – internal invoice number with which the asset is
purchased
o
Accts – accounts
inherited by the chosen asset group but can be revised for each asset
§ Asset Account
§ Accumulated Depreciation Account
§ Depreciation Expense Account
§ Capital Gains Account
§ Revaluation Reserve Account – an account, that
will be credited when the asset of the group increases its value after
revaluation
§ Revaluation Impairment Account – an account,
that will be debited when the asset of the group decreases its value
o
Depreciation
% - Accounting Records sub-level form – deprecation attributes for accounting
purposes. The fields are inherited by the chosen asset group
but can be revised.
§ % Depreciation – deprecation
% by linear method
§ % Accelerated Depreciation – deprecation % by accelerated method
§ Years of Accelerated Depreciation – number of
years for deprecation by accelerated method
§ Months of Accelerated Depreciation – number of months for deprecation by accelerated method
§ Residual value – residual value of the asset
after the depreciation. The asset will continue to deprecate until it
reaches the residual value. By default it is 0.
§ Prior Nominal Deprec – prior
asset deprecation if such exists from another system
§ Date of Prior Nominal – date of prior
deprecation
o
Depreciation
% - Tax Records sub-level form – deprecation attributes for tax purposes. The fields are inherited by the chosen asset group but can be revised.
After entering all the
information for the the asset it’s necessary to record a manual journal entry to
register the asset on its account.
How to automatically open a fixed asset based on an invoice?
You
can automatically open a fixed asset record for any part that appears in a
purchase invoice and is assigned to an asset group. The
program opens fixed asset records only for parts that have been assigned
to an asset group in the Financial Parameters for Parts form.
Open the purchase invoice and choose the direct activation:
o
Record
Fixed Assets (1 per unit) - This program opens a fixed asset
record for each unit of the part invoices in each line. For instance, if a line
in the invoice includes three units of a certain part, the program will
open three fixed assets, one per unit.
o
Record
Fixed Assets (1 per line)- This program opens a fixed asset
record for each line of the invoice. For instance, if a line in the
invoice includes three units of a certain part, the program will open one
fixed asset and "3" will appear in the Quantity column.
The created assets will have deprecation calculation start date(Effect Date) equal to
purchase date(Purchase Date). The date can be changed or deleted if the
effect date isn’t known.
After you record the asset it’s necessary to create a manual journal
entry to register it on its account if you don`t have it in the invoice.
How to calculate assets deprecation?
Go to Financials
-> Fixed Assets -> Fixed Assets Programs -> Calculate
Depreciation, choose one or more assets and the deprecation
calculation year.
Calculated
deprecations can be viewed by:
o
Report Financials
-> Fixed Assets -> Fixed Asset Reports -> Cost and Depreciation
o
Sub-level
forms Calculated Deprec Acc’ting Recs and Calculated Deprec – Tax Records in Fixed Assets form.
How to record depreciation in
ledger?
After calculating and reviewing the
depreciation, you can record it in the ledger. The depreciation records as a
debit against the asset’s depreciation account and a credit against its
accumulated depreciation account in a pending journal entry. Dates of the
journal entries depend on the way the system is set up,
i.e. monthly, tri-monthly, yearly accounting.
1.
Run the program from Financials -> Fixed Assets -> Fixed
Assets Programs -> Record Asset Tran in Journal, indicating
the range of fiscal periods for recording entries.
2.
Review the resulting pending
entries in the Entry Journal form. Revise as necessary.
Tip: Retrieve
by the prefix T* in the Journal Entry
No. field and DPR in
the Transaction field.
3.
Once the entries are
appropriately defined, select Post Journal Entry from the Actions list to
post them to the ledger.
How to record the disposal of a
fixed asset?
1. Enter the Fixed Assets form and retrieve the asset(s) in
question.
2. Move to the Sale tab,
and choose Sale/Scrap Code.
3. Specify the Sale/Scrap
Date.
4. If you sold the asset, choose type of
sales invoice and the invoice’s internal number in the Customer
Invoice field. The asset’s price fills in automatically in
the Value
from Sale field. Without an invoice, you can manually record
the sale price in the Value from Sale field.
5. Ensure that there is a Capital Gains Account
6. Run Calculate
Depreciation program from Financials >
Fixed Assets > Fixed Asset Programs > Calculate Depreciation only for the current asset
7. Run procedure Financials >
Fixed Assets > Fixed Asset Programs > Record Asset Trans. in Journal to open a journal entry for the disposal
of the asset.
Tip: Retrieve the journal entry by the
prefix T* in the Journal Entry
No. field and DED in
the Transaction field
in Journal Entry form. You can find it also in Fixed assets form,
tab Sale, Entry # Sale/Scrap
field.
8. Once the entries are appropriately
defined, select Post Journal Entry from the Actions list to
post them to the ledger.
How to generate an inventory report?
Go to Financials >
Fixed Assets > Fixed Asset Reports > Assets Register and select for which subsidiary/object and for which group of assets the
report should be prepared.