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LEARNING GUIDE
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Table of Contents
Chapter 1:
Introducing the Guide ......................................................................................................... 8
Chapter 2:
Explaining the Course ........................................................................................................ 9
Objectives.................................................................................................................................................. 9
Summary ................................................................................................................................................... 9
Chapter 3:
Business Office Overview ................................................................................................ 10
Objectives................................................................................................................................................ 10
Fixed Assets ............................................................................................................................................ 10
Fixed Assets Quick Start Reference ....................................................................................................... 11
Business Office ....................................................................................................................................... 12
Chapter 4:
Configuring Your System ................................................................................................. 15
Objectives................................................................................................................................................ 15
Configurations ......................................................................................................................................... 15
Using Fixed Assets ............................................................................................................................. 15
Departments ........................................................................................................................................ 16
Posting Assets..................................................................................................................................... 17
Accounts .............................................................................................................................................. 18
Asset Class ......................................................................................................................................... 19
Depreciation Types ............................................................................................................................. 20
Asset Departments .............................................................................................................................. 20
Asset Security ..................................................................................................................................... 22
Chapter 5:
Purchasing an Asset ......................................................................................................... 23
Objectives................................................................................................................................................ 23
Purchasing Process ................................................................................................................................ 23
Creating an Asset in Accounts Payable .............................................................................................. 23
Reviewing the Asset ............................................................................................................................ 26
Department Allocation Tab.................................................................................................................. 28
Depreciation Tab ................................................................................................................................. 29
Purchase Information Tab ................................................................................................................... 29
Case Study ...................................................................................................................................... 30
Chapter 6:
Setting Up an Asset .......................................................................................................... 34
Objectives................................................................................................................................................ 34
Setup Process ......................................................................................................................................... 34
Status .................................................................................................................................................. 35
Asset Settings ..................................................................................................................................... 37
Account Codes .................................................................................................................................... 38
Depreciation Settings .......................................................................................................................... 39
Chapter 7:
Maintaining an Asset ........................................................................................................ 41
Objectives................................................................................................................................................ 41
Maintenance Process .............................................................................................................................. 41
Viewing Asset Maintenance ................................................................................................................ 41
Chapter 8:
Check Reconciliation ........................................................................................................ 44
Objectives................................................................................................................................................ 44
Balancing your accounts ......................................................................................................................... 44
Reviewing the Depreciation Process .................................................................................................. 45
Depreciating Assets ............................................................................................................................ 48
Chapter 9:
Retiring, Selling, or Fully Depreciating an Asset ........................................................... 51
Objectives................................................................................................................................................ 51
Disposal Process .................................................................................................................................... 51
Disposing of an Asset ......................................................................................................................... 51
Maintenance ........................................................................................................................................ 52
Chapter 10:
Reports ........................................................................................................................... 53
Objectives................................................................................................................................................ 53
Reports .................................................................................................................................................... 53
Fixed Assets Summary Report ........................................................................................................... 53
GL Depreciation Expense Summary Report ....................................................................................... 54
Chapter 1:
This guide is a source of information on the configuration, set up, and use of Fixed Assets including its
features and functions.
Within this guide, you may find one or more of the following graphics and format to identify a particular
fact, aspect, or detail:
A Note will be used to identify specific information related to the text preceding it and will be
recognized by this type of format.
A Tip will be used to point out a suggestion or recommendation that will assist you
with the task or function preceding it and will be recognized by this type of format.
A Warning will be used to alert you to the consequences of a specific process, step, or its
results and will be recognized by this type of format.
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Chapter 2:
This chapter will provide an overview of the topics that will be addressed during the length of the course.
Agenda
Objectives
At the end of this course, you will be able to:
Perform the initial setup and configuration of Fixed Assets
Manage assets from acquisition to disposition
Record, maintain, and track your fixed assets
Depreciate and dispose of your fixed assets
Utilize comprehensive reporting
Summary
The course goals are to:
Understand all of the features available within Fixed Assets
Configure Fixed Assets and its components within Accounts Payable and General Ledger
accounts to work with your fixed assets
Establish a new asset from its purchasing to its depreciation stage
Utilize the reports to reconcile with your General Ledger
This course uses an approach of examining the five steps within the life cycle of an actual fixed asset in
great detail. By focusing on these steps, you will be able to successfully take an asset from its inception
(creating an invoice that eventually becomes an asset) to its completion (the full depreciation of an asset).
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Chapter 3:
This chapter will present an overview of the Business Office modules including features, functions, and
relationships associated with a fixed asset.
Objectives
At the end of this chapter, you will be able to:
Recognize the relationship that exists within the Business Office modules
Understand the features that are available within Fixed Asset
Fixed Assets
An asset is a resource that is purchased and used to operate your school such as computers, vehicles,
equipment, land, buildings, etc.
With the exception of land, most assets will depreciate in value over a period of time. Fixed Assets can
be used to identify the depreciation schedule for an asset, create and record actual depreciation
(expense) transactions, and track the history of an asset.
Depending on the depreciation method that is used, your results will vary. Some assets depreciate
quickly and therefore an accelerated depreciation method will allow you to balance costs over the life of
the asset by allowing a fast write-off approach.
Scenario
Lets take a look at an automobile that was purchased for $20,000 and is expected to have a useful life
for five years.
In this case, one-fifth of its value (which is $4,000) can be expensed (charged) each year to the
department using the automobile. However, you may also have additional expenses up front to account
for the immediate loss of value and you may also be able to sell the automobile after the five year period
(residual value). Fixed Assets will allow you to identify all of these criteria while maintaining your asset.
Each time a depreciation expense account is charged, an accumulated depreciation account is also
charged to offset the asset account.
The net of the two accounts will become the book value of the asset.
Continuing with the same example of the automobile shown above, the asset account balance is $20,000
and the accumulated depreciation account balance is $0 when the vehicle is purchased.
As depreciation occurs, the accumulated depreciation expense will increase. After the first year, the
depreciation of $4,000 (that is, one-fifth of the purchase price) becomes accumulated depreciation and,
since the asset balance is $20,000, the book value becomes $16,000.
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There are three major stages with specific types of ledger accounts that are commonly used for a fixed
asset:
Fixed Asset Account contains the original cost of all of the assets
Acquisition Stage
of that particular type and will usually be identified with a debit
balance.
Depreciation Stage
Retirement/Disposal Stage
In the Common module, choose the setup mode while initially configuring and
verifying your Fixed Assets
o Go to the Maintain Configuration window
o Locate FX_SETUP function and choose the configuration value of N
In the General Ledger module, identify your department component that is, any
grouping that you will use to designate a cost center
o Go to the General Configuration window
o Locate the Fixed Asset Department dropdown in the Component Configuration group box
In the General Ledger module, associate the appropriate General Ledger account
numbers with Fixed Assets (only accounts that are so identified will be available in
your Fixed Assets)
o Go to the G/L Accounts window
o Select the Fixed Asset account type for respective accounts
In the Fixed Assets module, configure your Asset Class values to identify groups of
assets
o Go to the Asset Class window
In the Fixed Assets module, configure your Asset Depreciation Type values (straightline or declining base method)
o Go to the Asset Depreciation Type window
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In the Fixed Assets module, set up your security which can be assigned to a
particular department or asset class combination or all
o Go to the Assign Permissions to Assets (Asset Security) window
o Users must have at least View access in order to use Fixed Assets
Business Office
Within the Business Office suite, Fixed Assets integrates with both Accounts Payable and General
Ledger.
Asset information can be sent to Fixed Assets as soon as an asset is purchased through the Invoices
window in Accounts Payable. When an invoice is identified as containing a fixed asset, it can be flagged
to create an asset as it is entered. When the details of the invoice are entered, you may assign an
existing asset number or create a new asset number to assign to the detail. Once the invoice is saved,
the asset will be sent to Fixed Assets.
Similarly, as you depreciate an item in Fixed Assets, this information can be transferred over to your
general ledger accounts so that reconciliation can occur.
You must identify your fixed asset balance sheet accounts in General Ledger.
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By assigning these sub-categories to accounts, only these account numbers will be displayed within
Fixed Assets thereby reducing the number of accounts that are displayed. This could be very beneficial
since only Fixed Asset accounts will be displayed and the possibility of selecting the wrong account will
be greatly reduced. In addition, finding the correct account to assign will take less time.
Fixed Assets offers two methods for calculating depreciation:
An equal amount of depreciation expense is assigned to each year of asset
Straight-line
use. Depreciable cost is divided by useful life in years to determine the
annual depreciation expense.
Declining-balance
The factors used to calculate depreciation in these two methods include actual cost of the asset, its useful
life (in years), and its residual value. Different depreciation methods produce different results. Using
accelerated depreciation methods, faster write-offs occur during the early life of the asset, which helps
balance costs over the lifespan of the asset.
You can define Asset Depreciation Types, Asset Departments, and Asset Classes
Asset Security can be assigned to your groups using Task List
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To completely understand the concepts of a fixed asset, lets use the illustration below of a fixed asset life
cycle:
The life cycle of a fixed asset consists of the following five steps:
1 Purchasing an Asset
2
Setting up an Asset
Maintaining an Asset
Depreciating an Asset
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Chapter 4:
This chapter will provide the initial set up and configuration that needs to occur within your Business
Office in order to successfully utilize Fixed Assets.
Objectives
At the end of this chapter, you will be able to:
Configure Fixed Assets
Understand the components within Fixed Assets and the manner in which they are used
Assign security for individual user groups
Configurations
There are several configurations that need to be performed before you can utilize all of the functionality
provided in Fixed Assets. Lets take a look at each of these configurations.
Enter N in the Configuration Value field (this will allow you to bypass the validation
processes that are only applicable when entering new assets) while you are entering
your existing assets maintained on another system and configuring and testing Fixed
Assets
Click Save
Once you have completed your initial setup, you will want to change this Configuration Value to
Y so that complete validation on assets can be performed as they are entered into the system.
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Departments
This configuration is done in General Ledger. Any group that you may want to utilize as a cost center can
be identified as a Department (such as Math, Maintenance, etc.). While some assets will be used
exclusively by one department, others might be shared across departments. Fixed Assets allows you to
spread percentages of the assets depreciation (or gain/loss on the sale of the asset) across more than
one department. You can also set a fund as a Department if all of your fixed assets go into one fund.
1
Click Save
In the example illustrated above, component number 2 has been defined as the account number
component that will be used by Fixed Assets basically, a cost center relationship.
You can select any component within your account number but remember that this
is an important configuration for your Fixed Assets in order to identify the cost
center department for an asset. Whatever component is selected here will be
available as an option when defining your Asset Departments and will therefore be
displayed on the Department Allocation tab from the Asset Maintenance window in
Fixed Assets.
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Posting Assets
This configuration is done in General Ledger. Since assets can be created through Accounts Payable at
the time an invoice is entered, you can also configure whether each asset needs to be manually reviewed
before the asset can be posted to the general ledger.
1 Go to the General Configuration window
Selecting the checkbox will allow an asset to be posted to General Ledger without
prior review
o If the checkbox is not selected, the asset will be imported from Accounts Payable into Fixed
Assets in a Review status and will need to be moved into another status before it can be
posted to the General Ledger
Click Save
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If you choose to allow posting of assets before they are reviewed, invoices that are turned into assets can
be posted on the Transaction Groups window in General Ledger before they are reviewed in Fixed
Assets.
Accounts
This configuration is done in General Ledger. You will need to associate the appropriate GL account
numbers with Fixed Assets by selecting the Fixed Asset Account Type.
If account type is Asset, the options are Not an FX Account, Fixed Asset, Accumulated
Depreciation, Cash or AR, and Debt
If account type is Expense, the options are Not an FX Account, Depreciation Expense, and
Gain or Loss
If account type is Income, the options are Not an FX Account, and Gain or Loss
This designation will reduce the amount of time spent on setup by enabling Fixed Assets to select only
those GL accounts that should be used for fixed assets.
1
Page 18
Select each GL account number that will be made available in Fixed Assets
Click Save
Asset Class
An Asset Class is normally a collection of assets grouped together based on function (such as buildings,
furniture, vehicles, land, etc.) and is used for both grouping as well as for security to the module.
You may want to define the Asset Class similar to your GL accounts but more
specific.
This configuration is done in Fixed Assets.
1 Go to the Asset Class window
Identify the five-character codes that you will use for Asset Class and enter a
description
Click Save
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Depreciation Types
You will need to create your types and associate a method (straight-line or declining-base) that will be
used at your institution. Typically, you will want to use one or the other method and create a row for asset
class that may have different depreciable lives. When setting up your asset, you can then select the most
appropriate type.
If using the Straight-line method, you will only need to identify the Depreciation Factor Years (the
number of years when the asset will be depreciated) and do not use the Declining Base Percent.
As the illustration below demonstrates, you may want to realize the cost for a building over a longer
period of time while a computer will depreciate much quicker.
You may want to conduct some research into general accounting principles to
determine the number of years that are used for each type of asset.
This configuration is done in Fixed Assets.
1 Go to the Asset Depreciation Type window
Click Save
After you have defined your Asset Depreciation Types, you may select one from the Asset
Maintenance window as you enter an asset. All of the details associated with the type (such as
description, method, declining base percent, and depreciation factor years) will automatically default into
the Depreciation Settings section of the window.
Asset Departments
You will want to ask yourself the following question: What are the cost centers that will define ownership
of assets? When an asset is depreciated, you may want to have that expense associated with the
department; or, you may decide to have all expenses go into just one account and not allocate the costs.
In any case, you do have the flexibility to establish different departments for depreciation purposes.
As you will recall from a previous section, the component that was chosen on the
GL Configuration window will determine the account components that appear as
Asset Departments.
You may have particular components that have ownership capacity with assets and these can be
identified here. Create a row for each one and select both a depreciation expense account as well as a
gain/loss account for each department component.
Page 20
You can track the loss and assign it to a department you determine the level of detail that you would like
to use. In the example shown for the General Ledger configuration, we chose account component 2
therefore, you may want to keep your account numbers consistent for this component.
You may also decide to designate only one gain/loss account and assign that one account to every
depreciation expense account. If so, you will receive a message indicating that the two components do
not match for the department and that may be fine for your school.
In any case, the Asset Department configuration will be utilized by the Department tab on the
Asset Maintenance window and will also tie back to General Ledger.
This configuration is done in Fixed Assets.
1 Go to the Asset Department window
Right-click in Asset Department field to use the lookup feature and choose the
appropriate department (only the component that was selected on the General
Ledger Configuration window will be displayed)
Right-click in Depreciation Expense Account field to use the lookup feature and choose
the appropriate account number (only those accounts that have been designated as
a Depreciation Expense account earlier will be displayed here)
Right-click in Gain/Loss Account field to use the lookup feature and choose the
appropriate account number (only those accounts that have been designated as a
Gain/Loss Account earlier will be displayed here)
Click Save
If the department code does not match the same department code in the
Depreciation Expense and Gain/Loss account, an error message will be displayed;
however, you will still be able to save your configuration.
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Asset Security
The security here as with the GL component security is based on the Security Group ID that the user
belongs to for all other module permissions. Security can be assigned to a particular department or asset
class combination or to all (*).
This configuration is performed in Fixed Assets.
1 Go to the Assign Permissions to Assets (Asset Security) window
Identify the security that will be granted to each group for Asset Department and
Asset Class by clicking on the Modify or View Only radio button
In order to use the module features, users must have an entry in this table with at least a View access.
Scenario
Depending on your own preference, you may want to assign all permissions for the Math department to a
particular person. In that case, if an asset is shared by both the Math and the English department, both
departments will be able to view this asset.
On the other hand, you may want to assign all permissions for building expenses to the building manager,
office expenses to the office manager, etc. Since either of these theories is valid, you may want to take
some time to consider your own organizational preferences.
After completing these configurations, you will be ready to use Fixed Assets.
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Chapter 5:
Purchasing an Asset
This chapter will provide a step-by-step process for purchasing an asset using Accounts Payable.
Objectives
At the end of this chapter, you will be able to:
Create a new invoice/asset in Accounts Payable
Select the appropriate account for the asset
Enter specific details about the asset
Purchasing Process
The first phase of the fixed asset life cycle begins with purchasing an asset. Consider the following:
Begin in Accounts Payable
Create assets while entering an invoice
Define your fixed asset balance sheet accounts
Create more than one asset and accumulate the costs from several invoices
Manage Construction-in-progress (CIP) projects by entering multiple invoices against the same
asset
Review invoices that have been posted against an asset from the Purchase Information tab of
the Asset Maintenance window
Select the appropriate configuration to determine whether invoices can only be posted to the
general ledger after the asset has been moved out of the Review status
Create assets against an expense account initially, if your budgeting has been set up to do so
Click on the New button on the bottom left of the window the Invoices window will
open with the Header tab active
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Click Save
Click on Detail tab here you will need to make some decisions about the fixed asset
o This is where you can identify certain percentages of the invoice to be credited against
more than one account in this case, we will allocate 100% of the cost to one account.
You can choose an account code or charge to an expense account (associated with a
budget) in an interim period and then move it out of that expense account and into
an actual balance sheet account right-click on the Account Code field and look for
asset (A) or expense (E) account numbers
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Use the scroll bar to view several other details that are available on this tab. The
last field on this tab is Asset Number and you can enter a number here if the asset
already exists or right-click and select the Create New Asset option
When you select the right-click option, the Create New Asset popup window will be
displayed and you can enter basic information here about the asset (you can either
enter the number directly or click on the ellipses to view a listing of all assets that
have already been created).
o The Description field for the asset will automatically display the transaction description that
was entered on the invoice.
Click OK the asset number will now appear on the Detail tab
10 Click Save
o Not only is an invoice created but an actual asset has also been created in Fixed Assets.
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Click Yes to view a list of all the assets that were created through Accounts Payable
as illustrated here:
Double-click on one of the assets you would like to review and the Asset Maintenance
window will appear
You will now be able to change some of the details that were entered when the asset was originally
created. The five required components that must be identified for an asset have already been chosen as
illustrated below:
Page 26
You may change any of the information on this window that is available for editing
and click Save
If you choose the configuration that allows assets to be posted to the general ledger before it has been
reviewed, you will also have an opportunity to create a journal entry (reclassify the asset cost to an
expense account that was not originally identified) and reject the asset.
4
When the Reject and Reclassify Asset window appears, you can change the account
number to which the invoice was charged and reclassify the asset to an expense
account
o If the invoice was not yet posted, the invoice line item will display the new account number
when the Reject Asset button is clicked
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Click Save
Remember, the departments that are displayed from the drop-down menu are the
same that have been identified in the Asset Department configuration, which is also
tied back to the account component for fixed assets that was defined in the General
Ledger configuration.
When the depreciation transfer is run, the credits are associated with the accumulated depreciation
account and the debits are associated with the department allocation.
If allocation percentage has been split and depreciation occurs, two debit transactions will be created
one for each depreciation expense account. However, only one total amount will be allocated to the
accumulated depreciation account.
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Depreciation Tab
You may have an item that is depreciating click on the Depreciation tab to view specific details
regarding the transactions. In this case, lets take a look at an iPhone 4 that was purchased for the
English Department.
As you can see from the illustration above, a tree view will be displayed. Click on the plus sign to expand
information related to the costs that have been accumulated by year, month, and day. You can drill down
to the individual invoice that shows details related to the asset on one line.
When depreciation occurs, two debit transactions will be created one to each depreciation expense
account
Her you will be able to view all of the invoices that have been associated with the same asset. These
invoices should total the amount shown in the Asset Cost on the Master tab.
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The information that is displayed on the Purchase Information tab originates from the Detail tab of the
Invoices window in Accounts Payable. Therefore, when an asset is entered directly into Fixed Assets,
no information will be displayed on this tab.
Double-click the invoice from the tree view to view its contents or you can select
Display Invoice from the right-click options.
Case Study
What happens if a new invoice was created in Accounts Payable and, when it is sent over to Fixed
Assets, the review process determines that the invoice is actually not an asset?
1
Open the Review New Assets from AP window to see a list of assets
Highlight the asset that should not have been created and click on the Reject Asset
button
The Reject and Reclassify Asset window will be displayed along with a list of the
transactions that were created as part of this asset
Highlight the transaction(s) that need to be removed and click on the Reject Asset
button
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Another window will be displayed asking you to verify that the asset should be
rejected
Click Yes
If the asset had already been assigned to an invoice in Accounts Payable, you will
receive the following message which also shows the invoice number:
Remember you do not want to post an asset against an asset account but rather an expense
account.
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You will need to first remove the asset from the invoice and, in order to do that, you
will need to know the GL account that has been associated with the invoice return
to Accounts Payable (Transaction Groups), enter the group number, and locate the
invoice that generated the asset
10 Highlight the asset that needs to be removed and click on the Delete Selected Rows
button
The asset has now been removed from the invoice you can now go back into Fixed Assets and delete it
from the Review New Assets from AP window. This will ensure that everything will be balanced since
you have adjusted the invoice and deleted the asset.
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Assets can be created against an expense account initially if your budgeting has been identified as such.
You can always change the asset account number in Fixed Assets (Asset Maintenance window) if you
want to create items against an expense account for AP purposes. Although the information is sent over
from Accounts Payable to Fixed Assets, you probably want to change the account for reporting purposes
in Fixed Assets.
Changes made in Fixed Assets will only affect how that module organizes or
categorizes the assets nothing will change on the budgeting side.
Depending on the policies established at your school, you may choose to review and post assets on a
monthly basis and remember that invoice numbers must be removed from the asset before it can be
posted.
This process will only apply if you chose to have assets reviewed before they can be
posted to the general ledger.
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Chapter 6:
Setting Up an Asset
This chapter will focus on the specific details of defining the characteristics of an asset so that you can
track its status within your business office.
Objectives
At the end of this chapter, you will be able to:
Select the appropriate status for an asset and recognize the impact of each status when it is
changed
Understand the various details that are displayed on the Asset Maintenance window including
asset settings, account codes, and depreciation settings
Setup Process
The next phase of the fixed asset life cycle includes setting up an asset. Consider the following:
Assets can be created in either Accounts Payable or directly in Fixed Assets
You must first remove an asset from the invoice before it can be deleted in Fixed Assets
Depending on the configuration selected, assets can be placed in a Review status when they are
brought into Fixed Assets through Accounts Payable and will need to be moved into an On Hold
or CIP status otherwise, you can choose the configuration that will allow assets to be posted to
the general ledger without prior review
You define the asset classes to which the asset is assigned
You determine the balance sheet accounts to which assets are assigned
An asset can be entered either as an invoice that was created in Accounts Payable (as was explained in
the previous chapter) or directly in Fixed Assets as will be explained in this chapter. In either case, the
Asset Maintenance window is the basis for establishing all of the characteristics of the asset.
Before you enter assets into Fixed Assets, you must first use your previous system to run
depreciation on all your assets through the end of the current fiscal year. Omitting this step will
produce erroneous calculations.
If you have existing assets that need to be entered into Fixed Assets, remember to indicate the
Depreciation Begin Date, which is when the asset first began to depreciate. When you select the
Depreciation Type, the Depreciation End Date will automatically be calculated. Enter a Depreciated
Through date so that the system will not select the assets that have already been depreciated (consider
entering your existing assets up to the last fiscal year). Then, in the current year, you can close out each
month and keep your system updated.
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Status
The status is very important to an asset. The descriptions indicate the characteristics for each status and
the table below indicates the required information that is needed for each status.
Review (W)
Indicates new assets that have been submitted through Accounts Payable.
Construction in
Progress (CIP)
Indicates that the asset is not yet being used (for example, building and
machinery installation). You can identify more than one AP invoice to be
assigned to the asset thereby accumulating the costs.
On Hold (N)
Is the default status that is applied to assets created in Fixed Assets. You
can indicate that the asset requires the completion of additional transactions
so that all associated costs can be applied to the asset and the depreciation
process can then begin.
If you change an asset that is identified as Review, CIP, or On Hold to any
other status, you will receive a message Once an asset has begun
depreciating, it cannot be changed back to On Hold or Review status.
Depreciating (D)
Non-Depreciating (P)
Indicates that an asset has reached the end of its estimated useful life.
Although the asset can continue to be used, it cannot continue to be
depreciated.
When an asset can no longer be depreciated that is, it has depreciated up
to its appraisal value - the system will automatically assign the Fully
Depreciated status to the asset. If you manually change an asset to Fully
Depreciated and the Current Book Value is not equal to the Residual
Value, you will receive the following message: This asset has not been fully
depreciated. The status cannot be changed to fully depreciated until the
Current Book Value is 0.
Retired (R)
Sold (S)
Is used when an asset has been sold and is no longer in your possession.
Once an asset has been sold, the status cannot be changed.
Salvaged (V)
Indicates that the asset has been sold for parts of junk that is, the asset
was not sold as a complete item. Once an asset has been salvaged, the
status cannot be changed and the following values cannot be modified:
Depreciation Begin Date, Depreciation End Date, First Year Bonus,
Previous Depreciation, Residual Value, Depreciation Partial Period
Election, and Depreciation Type.
You can configure whether invoices will not be posted until the asset has been
moved out of the Review status.
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CIP
Asset Cost
Acquisition Date
Purchased Outright
New or Used
Asset Class
Asset Type
Asset Account
Depreciation Type
Accumulated Depreciation
Salvage Price
Salvage Date
If an item has been purchased, the Review and CIP options will be used. As you may recall from
a previous chapter, every new asset that is created in Accounts Payable will be automatically
assigned a Review status so that the information can be verified when transferred over into Fixed
Assets.
Assets identified with an Onhold status will not be depreciated and, if you change an asset from
Onhold to another status, you will receive a message indicating that once it has been moved from
Onhold, the asset cannot go back to that status again.
Once an asset has been moved to Depreciated status, you will receive messages every time the
asset is saved to ensure that it has been properly assigned. This additional validation has been
created as an extra security measure.
When creating a new asset in Fixed Assets, the default status will be Onhold this indicates that you are
not yet ready to depreciate the asset.
1
Right-click on the Asset Number/Description field and use the Asset Master Lookup
option for the next available number
Click Yes when the prompt window asks if you want to create a new asset
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Asset Settings
When the Purchased Outright checkbox is selected, the Liability Account in the next
section will be displayed only when no debt is associated with the asset if this
checkbox is not checked, you may want to associate the balance sheet with the debt
Use the appropriate checkbox to identify whether this asset is New or Used
In order to assign the asset, you will need to select the Asset Class and Asset Type
o The Asset Class is defined by you as explained in the Configuring your System chapter on
page 19; whereas the Asset Type is delivered with the software and cannot be changed.
Depending on the asset type, additional tabs may become available on this window as
illustrated above.
In terms of basic setup, the important items to define are the cost of the asset, when it was acquired,
whether it was purchased outright, and the asset class and type. At this point, the asset can be saved.
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Account Codes
You can determine the specific balance sheet accounts for which assets can be assigned.
1
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Depreciation Settings
The information identified in this section is critical for depreciation purposes. Whenever a
Depreciation Expense Transfer (DET) has been performed, the numbers in this section will
change to reflect the depreciation values. Also, the Depreciation Through date will be time
stamped with the date when the DET was processed.
1
Set a begin date to depreciate the asset in most cases, this will be similar to the
acquisition date; however, while acquisition date is the exact day of the month when
the item was acquired, depreciation begin date must start the first day of the month.
o If you have already identified your Asset Depreciation Types with the Depreciation
Factor Years, your end date will automatically be calculated when you select the
depreciation type.
The Depreciation Begin Date is very important since depreciation will be calculated according
to this date.
2
First Year Bonus is optional you may have an asset that has the largest amount of
depreciation in the first year (such as an automobile). In this case, you can
depreciate the item and then add on the bonus amount (this can only be done for
the first year of depreciation).
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Residual Value indicates that an asset never really depreciates down to nothing
(again, using the example of an automobile). The automobile never loses all of its
value; so if you know that you will always be able to receive $500 for the
automobile, you can enter this Residual Value amount.
Previous Depreciation is utilized when an existing asset is being entered from another
system. You can enter the amount that was accrued and, from the moment the
asset is saved, Fixed Assets will calculate the next depreciation amount.
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Chapter 7:
Maintaining an Asset
This chapter will explain the features that are available in Fixed Assets, which will allow you to track
information and details related to an asset.
Objectives
At the end of this chapter, you will be able to:
Identify specific characteristics for assets
Create a report to display your assets
Maintenance Process
The next phase includes maintaining an asset. Consider the following:
You can change the depreciation expense account to which the asset is charged against and
rerun the Depreciation Expense Transfer
As assets are moved, you can assign a location, building, and room code for each asset
Assets can be identified with serial numbers and inventory tag numbers for tracking purposes
You can use the Notes tab for maintenance history
You can enter appraisal values, assign an asset to an employee, assign the asset to a donor, and
track specific details for vehicles
Use the Fixed Asset Information Report to analyze your assets and customize reports to fit your
specific needs
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Notice that you can enter an Appraised Value for this asset as well as the date of the appraisal. You can
assign the asset to an employee by choosing the employee ID number (if the Asset Type is a vehicle,
this employee ID number will also be identified as the driver of the vehicle).
In addition, notice that you will NOT be able to change any of the depreciation settings since the asset
has already started to depreciate.
Depending on the Asset Type that is selected on the Master tab, other respective tabs will become
available. In this example, the asset is a mower; therefore, the Equipment tab is available. When the
Asset Type is a vehicle or building, these tabs will become available and you will be able to track
information such as make, model, license plate, location, etc.
1
You can change the amount of allocation for each department at any time or even delete the existing
department and choose a different one. Then, the next time you process a Depreciation Expense
Transfer on this asset, the report will display the new depreciation that will be applied to the modified
department.
2
Click on the plus signs to expand each row until you see a tree view similar to the
illustration above
Notice that the level of detail shows the date and amount of depreciation on the asset as well as the
specific transaction group that was created in General Ledger to reflect this depreciation.
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Click on the plus signs to expand each row until you see a tree view similar to the
illustration above
You can view specific details related to the actual purchase of the asset
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Chapter 8:
Check Reconciliation
This chapter will explain how to utilize the process of depreciating assets.
Objectives
At the end of this chapter, you will be able to:
Understand the process that occurs when Depreciation Expense Transfer is performed
See the changes that are reflected in both Fixed Assets and General Ledger when depreciation
occurs
Understand the information that is displayed on a Depreciation Expense Transfer Report
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Go to the Depreciation Expense Transfer window; when the window opens, you
will see that the window is divided into three steps
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Depending on the fiscal year that has been identified on the General Ledger configuration, the respective
months will be available in the Fiscal Month drop down menu.
At this time, there are is no relationship between a month-end or year-end close and a depreciation
transfer; therefore, when performing a month-end or year-end close, the software will not remind you that
depreciation has not yet occurred.
The fiscal month that is selected for the Depreciation Expense Transfer will be compared with the
Depreciation Start Date since these two components are tied together. Therefore, the depreciation will
be calculated from the start date to the fiscal month that is selected.
3
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The first page of this report will display all of the debits for the account that is being displayed and the
amount is the total credit transactions in the batch.
The second page of this report will display the account code, which is actually the accumulated
depreciation account on the Master tab of the Asset Maintenance window as shown below. The debits
(assets) against the expense account will be displayed as No of Rows Listed and should net to zero in a
batch.
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Depreciating Assets
After you have performed a Preliminary Run by clicking the Review Depreciation button, and verified
that the information is correctly identified, you can move to step three of the Depreciation Expense
Transfer window.
5
The G/L Batch Date will be used to identify the batch depending on how you have set up your General
Ledger, you may want to use a month close date that stays in line with your fiscal month date. If you
decide to only calculate depreciation at the end of the year, you may choose a G/L Date of June 30 to
identify the end of your fiscal year.
Click the Create GL Batch button to send journal entries to General Ledger
While we recommend that you run your depreciation on a monthly basis, you do
not necessarily have to book this depreciation on your General Ledger every month
this can be done on a quarterly or annual basis.
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Notice that you now have a Group Number (106) displayed on your report which was not displayed on
the preliminary run this indicates that a transaction group has actually been created in General Ledger.
1
Locate transaction Group Number 106 (notice that this group is currently in
Suspended status)
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You will be able to see the two entries one entry shows the accumulated depreciation and one entry
shows the depreciation expense for each account or department.
You may delete a batch on the Transaction Groups window by highlighting the group and clicking on the
Delete Selected Rows button. After you have done so, return to Fixed Assets and notice that the
accumulated depreciation value will be reset on the Asset Maintenance window. In addition, the
Depreciated Through date will revert back to the last depreciation.
You cannot delete individual assets from a batch only the entire batch can be
deleted.
Scenario 1:
You may find that an asset should have been entered in the previous month but it was discovered after
the Deprecation Expense Transfer was performed. If you try to enter the asset in the next month, you
will receive an error message indicating that the asset does not have a Last Month Depreciation
Calculated.
Therefore, the solution will be to re-process the Depreciation Expense Transfer for the previous month
so that the new asset is found. A separate batch will be created for this asset and you will then be able to
continue with the next month.
Keep in mind that you can process a Depreciation Expense Transfer for only one asset.
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Chapter 9:
Asset
This chapter will explain the last step in the life cycle of an asset that is, reaching the end of its
depreciation.
Objectives
At the end of this chapter, you will be able to:
Understand how to dispose of an asset in Fixed Assets
Disposal Process
The next phase includes retiring, selling, or fully depreciating an asset. Consider the following:
Always indicate the amount of the sale and date when selling an asset
Determine the journal entry you need by running the Disposition of Assets Report
Fixed Assets will automatically retire an asset when it has been fully depreciated
Once an asset is retired or sold, it will no longer be depreciated
Disposing of an Asset
You may determine that an asset is to be sold, retired, or has reached full depreciation. In this case, you
will need to first select the appropriate status. In the example illustrated below, we will assume that the
asset has been sold.
1 Go to the Asset Maintenance window
2
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Enter the Sales Price and Sale Date, which has now become editable
Enter a Receivable/Cash for Sale Account (this is where the money received from the
sale of the item will be applied)
Click Save
Depreciation will no longer run on this asset since the status has been changed to Sold the same holds
true for an item that is Retired or Fully Depreciated.
This also identifies the need for your General Ledger to be updated since youve just reduced the cost in
your Fixed Assets. Therefore, the asset account and accumulated depreciation accounts no longer need
to be affected by this asset and the sales price will be entered into a cash account.
Maintenance
You can create a journal entry in the General Ledger to keep your records
synchronized.
Run the Disposition of Assets report.
This report will display the item that was sold according to the time frame selected for the report. The
account number displayed on the top left of the report indicates the department to which the asset was
assigned.
This report also shows the gain or loss that was realized through the sale of this asset which will help you
create your journal entry in the General Ledger for the asset that was sold. You can choose to create
your journal entries on a monthly or annual basis depending on your own personal preference.
When the final depreciation has been performed on an asset, the status will automatically become Fully
Depreciated.
When an asset is moved into a Retired status, you will be able to enter a Salvage Price and Salvage
Date on the Asset Maintenance window. As is done with other assets, you can then run a Disposition
of Assets report to view the assets that have been retired and create your journal entries in General
Ledger to keep your books synchronized.
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Objectives
At the end of this chapter, you will be able to:
Produce several reports to display information related to your fixed assets
Reports
A series of six reports are available directly within Fixed Assets four of these reports will allow you to
reconcile with the General Ledger.
GL Fixed Assets Summary
GL Depreciation Expense Summary
GL Accumulated Depreciation Summary
CIP Summary
Disposition of Assets
Fixed Asset Information
While an asset that has been acquired after the date selected will not appear on this report, the
asset should be associated with your GL balance for the same date. If not, this indicates that
your Fixed Assets does not know about everything that is associated with your GL account and
you will need to investigate the problem further.
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If you recall, the Asset Maintenance window displayed an amount called Previous Depreciation, which
could have been brought over from another system. This report will take that amount into consideration
and will sum all of the totals on this report. You can view all new depreciation that was accrued, add
them to the previous depreciation, and still reconcile with your general ledger.
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Objectives
At the end of this chapter, you will be able to:
Assign group-level access to specific departments or classes
Assigning Security
You can utilize the security feature in Fixed Assets to only allow certain groups to view specific
information.
In order to use this feature, you will need to first establish and set up your groups in Task List.
After you have your groups identified, you can then assign specific access for each group.
1
Use the drop down menu to select a Group ID these are the groups that have been
set up using Task List
Moving across the columns in this window, continue to assign security by department
and class or you may choose to assign Access to all Departments and Access to all
Classes for each of your groups it depends on your preferred method for using the
security feature
The Modify or View Only radio buttons will also need to be selected for each group to
determine whether or not information in the Asset Maintenance window can be
modified or displayed in read-only mode
When an asset is shared across two departments (such as English and Math), both departments will
have access to the asset. While this situation may be fine, it is something that should be understood.
Remember that you also have the option of assigning security at the class level rather than at the
department level. In any case, you will probably want to consider all of your options.
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