This window is used to display details about Fixed Asset accounts. You also add, edit and delete accounts in this window.
A separate window is used to maintain other general ledger accounts. Click Here to go to help for adding other general ledger accounts.
Introduction to Fixed Assets
To read more about fixed assets and fixed asset deprecation you can click this link to go to Wikipedia, which gives an easy-to-understand introduction to fixed assets.
To read more about fixed assets use one of the follwing links:
Normally an existing account is opened from a link in another window. However, you can search for an account as well.
Search for an account in the search field in the top right-hand corner of the window. Enter the search string and click thebutton to find matching accounts.
In this window all accounts are searched, not only accounts that you can capture on. I.e. the list will also display parent accounts and system accounts.
Edit an Existing Fixed Asset Account
Click the Edit button. Proceed by editing any information on the account and save the changes.
Editing Accounts
Changing certain properties of accounts may invalidate your books. Therefore, it is highly recommended that you verify your changes with your accountant.
It is important to note that if you change the lifetime or depreciation rate of a fixed asset, you have to rebuild the Depreciation Plan
Deleting a Fixed Asset
Click the Delete button to delete the account. You will be asked to confirm that you want to delete the account.
Please note that the Accumulated Depreciation Account for the fixed asset will also be deleted.
Can The Fixed Asset Be Deleted?
Only fixed assets with no transactions can be deleted.
If any financial transactions have been entered for an account, it is not possible to delete the account. This is to preserve the integrity of your financial records, where every transaction has to be accounted for. The only exception is in the case of an incorrect entry which can be voided.
If the account cannot be deleted, you will be notified that the delete was unsuccessful.
Deactivating an Account
If it is not possible to delete an account, the account can be deactivated.
To deactivate an account, select status Inactive and click Save
An inactive account will not display in any selection boxes, and no new transactions can be added. However, inactive accounts may appear in statistical reports and can be reactivated at any time.
Filling Out Fixed Asset Details
Field
Do
Account Number
This field contains the account number. Enter the account number you want to add. Account Number can be kept blank if you want the system to assign an account number. A ledger accounts has to have a number between 1000 and 9999.
For Fixed Assets it is recommended that an account number is not entered. It will be assigned an account number from the fixed asset register it belongs to.
Name
Enter the account name. This field is required
Account Code
Enter an Account Code for the account. This is an alphanumeric code that can be used to identify the account. It is used when searching for accounts. An account code is not required and can be left blank.
The Account Code must be unique across all general ledger account codes and party codes for customers and suppliers.
The account code can be used to store account numbers from third-party systems. It can be alphanumeric up to 25 characters long. When transactions are imported from third-party systems the account code can be used as the account identification for the account.
Tax Code
Select the default VAT Code for this account. Click here to learn more about VAT codes.
If you can claim input tax, you should select the appropriate VAT code for Capital Goods. If you cannot claim input tax, select 0-rated.
Business Unit
Select the default business unit for the account.
Lock To Business Unit
The default busines unit setting does not disallow other business units to capture transactions on the account. If you want to lock the account to the default business unit, or sub-units of the default business unit, tick this checkbox. When an account is locked to a business unit, only that unit or its sub-units can capture transactions on the account.
Accounts are normally not locked to specific units.
Status
Select a status for the account. If Inactive is selected, the account will not display when you search for accounts.
Map To Group Account
Select which group account this account belongs to.
If a group account does not exist, it has to be created on the parent company before it can be mapped to.
This setting is only applicable for companies belonging to a parent company. In other words only subsidiaries will see this setting.
Fixed Asset Register
A fixed asset must belong to a fixed asset register. Fixed asset registers are used to group similar types of fixed assets together.
Fixed Asset registers are similar to parent accounts for other groups of ledger accounts.
Accumulated Depreciation Account
This field displays the Accumulated Depreciation Account bound to the Fixed Asset.
Please note that only [New] can be selected when adding a new fixed asset. When a new fixed asset is created, the Accumulated Depreciation account for that asset is created at the same time. Furthermore, it is not possible to change the accumulated depreciation account after the asset has been created.
The Accumulated Depreciation is used to capture depreciations on the fixed asset. It cannot be maintained manually and is fully controlled by the fixed asset account it is bound to. Thus, if clicking a link for the Accumulated Depreciation account, the fixed asset account will be displayed.
Purchase Date
Enter the date the fixed asset was purchased.
Purchase Price
This is the original purchase price of the fixed asset excluding VAT.
This field is required required and should have the same value as the supplier invoice containing the purchase of the fixed asset.
Depreciate Fixed Asset
Enable depreciation of the fixed asset. If this setting is disabled a depreciation plan will not be created and the asset will not be depreciated when processing Wear and Tear Depreciation. If disabled, depreciation must be done manually.
Depreciation Base Value
This is the Deprication Base Value of the fixed asset excluding VAT. The Depreciation Base Value is the value used as the base for depreciations of the fixed asset. Normally this value should be equal to the captured purchase price (or take-on balance) of the fixed asset.
It is important to note that if there is a difference between the Depreciation Base Value and the net book value at the end of the first depreciation period this difference is NOT considered an addition to the fixed asset. In such cases, the difference is considered a non-depreciable value and will not be part of the depreciation schedule. Subsequent additions/disposals are added/subtracted on theur respective depreciation period.
Please note that if annual depreciation is used, first year additions are the sum of actual amounts on the fixed asset account for all periods in the first financial year, except for the first depreciation period.
Some situations that require consideration when setting the depreciation base value:
When you are starting up with SMARTEDGE and you are registering existing assets, this value should be set to the current net book value of the fixed asset. In other words it should be equal to the original purchase price less prior accumulated depreciations. This is to ensure that the remaining depreciation of the fixed asset will be correct.
If the fixed asset's price is substantially different from the market value you should consult your accountant on which value to enter (i.e. the purchase price or the market value). This could be the case if the asset is bought second-hand. If you are not allowed to depreciate the full value of the purchase price, set the Depreciation Base Value to the value that can be depreciated. In such cases, there will be a remaining balance on the fixed asset after all depreciations have been captured.
The Depreciation Plan will be rebuilt if this value is changed.
Residual Value
Residual value, or Scrap Value, is the value of the asset at the end of its lifecyle. When the Reducing Balance Method is used, depreciations will stop when the value of the fixed asset has reached this value. For Straight-Line Basis depreciation, the residual value is deducted from the initial cost of the asset when the depreciation is determined.
Residual value must be larger than 0 if Reducing Balance Method is used.
The Depreciation Plan will be rebuilt if this value is changed.
Depreciate From Month
Select which month to start depreciation. Normally this is the month the asset was purchased or the following month.
For monthly depreciations, the depreciation is captured on the last day of the financial month.
For annual depreciations, the depreciation is captured on the last day of the financial year.
The Depreciation Plan will be rebuilt if this value is changed.
Depreciation Method
Select the Depreciation Method. There are to options:
Straight-Line Basis will depreciate the asset in similar annual amounts over its lifetime.
Reducing Balance Method will depreciate the asset based on the running book value at the end of the previous financial year.
The Depreciation Plan will be rebuilt if this value is changed.
Depreciation Rate
Reducing Balance Depreciation Method Only.
Enter the depreciation rate in percent. The rate you enter here determines how much the fixed asset will be depreciated each year.
Annual Depreciation =
Depreciation Rate * Book Value at Beginning of Year
The Depreciation Plan will be rebuilt if this value is changed.
Lifetime
Straigh-Line Depreciation Method Only.
Enter the lifespan of the fixed assets in months. Monthly Depreciations will be calculated using the formula:
Monthly Depreciation =
(Depreciation Base Value - Residual Value)
(Lifetime in Months)
If there are any additions to the fixed asset, the depreciation value will be adjusted from the month following the addition to:
Monthly Depreciation =
(Depreciation Base Value + Additions - Residual Value - Accumulated Depreciations)
(Remaining Life Time in Months)
The Depreciation Plan will be rebuilt if this value is changed.
Depreciation Period
Select Monthly to perform depreciations every financial period, at a rate of 1/12 of the annual depreciation. Select Annual to perform depreciations for the whole financial year on the annual (13th) period.
Please note that monthly depreciations is not allowed for Reducing Balance Method.
The Depreciation Plan will be rebuilt if this value is changed.
First Year Depreciation Policy
This field determines depreciation method for the first year of the fixed asset's life-time i.e the year the asset was bought. By selecting Pro-rata, the depreciation amount the first year will be reduced, depending on when during the year the asset was bought. By selecting Full, the depreciation amount for the first year will not be reduced.
Please note that if depreciation period is set to Monthly Depreciations the first year policy must be Pro-Rata.
The Depreciation Plan will be rebuilt if this value is changed.
Serial Number
Enter the fixed asset's serial number (optional).
Sticker Code
Enter the fixed asset's sticker code (optional). If used, the sticker code would typically be the code used on the label sticked to the fixed asset.
Asset User
Enter the name of the person that uses the fixed asset (optional).
Asset Location Address
Enter the address where the fixed asset is located (optional).
Building
Enter the building name where the fixed asset is located (optional).
Floor
Enter on which floor the fixed asset is located (optional).
Room
Enter in which room (number) the fixed asset is located (optional).
Asset Status
This is the fixed asset's status. It should normally be Open, until the Fixed Asset is disposed.
Asset Description
Enter a description of the asset. Optional.
Dispose a Fixed Asset
If a fixed asset has been sold or needs to be written down, you do that by disposing the fixed asset. To dispose a fixed asset, click the Dispose button at the bottom situated to the right of the Asset Status field (only visible if the asset has not already been disposed).
Go here to see the help page for disposing fixed assets.
Adding a new Fixed Asset Register
SMARTEDGE is set up with a pre-defined set of Fixed Asset Registers. For most businesses there will be no need to add additional fixed asset registers. If needed go to menu Financials » Fixed Asset » P70 Fixed Asset Register. From there a new register can be added.
Depreciation Plan
When the fixed asset is added a depreciation plan is automatically created for the fixed asset, provided the setting Depreciate Fixed Asset is enabled.
To view the depreciation plan, click on the tab Depreciation Plan.
The depreciation plan stipulates how depreciations will be done for the asset during its life-cycle. The plan will be monthly, if the company preferences setting for depreciations is monthly, otherwise it will be annual.
You can at any time rebuild the depreciation plan by clicking the button Rebuild Depreciation Plan. This will create a new deprecation plan. Any deprecations already captured on the fixed asset will remain on the asset and included when calculating the new plan.
How is the Depreciation Plan Calculated
Depreciations start in the month selected as Depreciation Start Month, which should be in the month the asset was purchased or after the asset was purchased. If annual depreciations are used and the First Year Depreciation Preference in company preferences is set to Pro-Rata, the depreciations will be pro-rata for the first year (this is the normal setting). If it is set to Full, the depreciations in the first year will be equal to a full annual depreciation even if the asset was bought in the last financial period. This setting is not allowed in many countries. Please note that this setting is only applicable if you do annual depreciations and is ignored if you do monthly depreciations.
The Depreciation Plan calculation will take into consideration any transactions captured on the asset after the first depreciation month. Normally the only change made to a fixed asset is its lifetime, but there may also be additions to the fixed asset. For reducing balance method and increase in lifetime is achieved by reducing the Depreciation Rate.
If any of the fields Depreciation Period, 1st Year Policy, Depreciation Method, Depreciation Base Value, Depreciation Start Month,Life Time,Depreciation Rate or Residual Value is changed the depreciation plan will be rebuilt when saving to take this change into consideration.
If depreciations already have been posted the new depreciation plan will take any old depreciations into account an either increase future depreciations (if the lifetime is reduced) or decrease future depreciaitons (if the lifetime is increased).
Any additions to the fixed asset are included in a depreciation plan. It is important to note, that additions are included from the year/month following the first depreciation month. Thus, unlike the initial cost, which depends on the first year depreciation setting in company preferences, additions are not depreciated in the purchase year.
Editing the Depreciation Plan
If the calculated depreciation plan is not how you would like the asset to be depreciated, you can manually edit the depreciation amounts. Please note that if depreciation amounts are entered manually, they will be overwritten if the depreciation plan is rebuilt. To enter depreciation amounts manually, a depreciation plan must be built first (in other words the purchase of the asset must be captured first).
Reviewing the Depreciation Plan
Field
Do
Status
Ready means that the period is ready for depreciation
Depreciated means that the period already has been depreciated. Click on link to view depreciation transaction
Month/Year
Period for depreciation in calendar month
Net Additions
This is the net amount posted directly on the fixed asset in the respective month. If the amount is negative, there has been a disposal captured.
Depreciation Amount
The amount that will be/have been depreciated according to the depreciation plan
Accumulated
Accumulated depreciations according to depreciation plan.
Depreciation Based End Book Value
This field shows the end book value of the fixed asset when considering only the Depreciation Base Value and additions and accumulated depreciations.
Estimated Actual End Book Value
This field shows what the actual end book value of the fixed asset will be taking into consideration any differences between the opening book value and the depreciation base value. These values will be the same as the preceding column if Depreciation Base Value is equal to the opening balance of the fixed asset.
If the depreciation base value is less than the actual initial cost of the fixed asset, this column will show a balance at the end of all depreciations. This balance will be equal to the difference between the actual initial cost and the depreciation base value.
Current End Book Value
This field shows the end book value of the fixed asset based on currently captured transactions. Future periods will be equal to the value for the current period, since future depreciation has not been performed yet.
Transactions
The transactions tab lists all transactions on both the fixed asset account and its Accumulated Depreciation Account for a given date-range. Fixed Assets are always displayed as T-Accounts.
SMARTEDGE Self-Contained Business Units (branches)
Please note that transaction and summaries are displayed for the current self-contained unit, which is displayed in the page heading.
Summary
The summary tab displays the sum of transactions on the fixed asset account and its accumulated depreciation account by month.
Documents
The documents tab lists all documents linked to the account.
