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Exact Financials   
 

Fixed Assets Manual - Creating master data and defining settings

Creating master data and defining settings

First define the package settings for your company. The settings determine part of the conduct of your fixed assets system. What you define in the package settings determines what data should be entered in your fixed assets accounting system and subsequently which data can be retrieved.

Next you should create master data. Part of the master data is descriptive and the other part helps determining the conduct of the fixed assets system. A depreciation method, for instance, describes how depreciation is done. Once you have defined the settings and created the master data, you can start defining your fixed assets.

You can check the data in the sub-menu functions of [Assets: Master data, Reports].

Creating index tables

You will probably use the index tables only in exceptional cases. By using index tables, you can determine the yearly depreciation percentage manually. You will probably use index tables when it is difficult to express the depreciation in a formula. When defining a depreciation formula you can use this yearly depreciation percentage. The yearly amount determined, is divided over the financial periods of a year equally. To use tables in a depreciation formula, you can link a table by selecting the data in 'Percentage_per_year' in [Assets: Master data, Maintenance, General, Depreciation formulas]. See [Creating depreciation formulas] below. You can link the index table in [Assets: Master data, Maintenance, Assets, Assets sets], provided that the selected depreciation formula code contains 'Percentage_per_year'. Create tables in [Assets: Master data, Maintenance, General, Index tables].

Creating depreciation formulas

Each fixed asset can be depreciated by several depreciation methods. Each method is based on either a depreciation formula or a depreciation table. A depreciation table allows you to depreciate manually. See [Creating depreciation tables] below. In Exact Fixed Assets, you can create and maintain these formulas yourself. Exact Fixed Assets also has a standard formula which you can use or change. Create depreciation formulas in [Assets: Master data, Maintenance, General, Depreciation formulas].

You can use several fields and functions to build a formula. Exact Fixed Assets provides the following fields:

  • Amount_depr_adjustment (The amount of depreciation adjustment)

    In the periods when revaluation took place in [Assets: Management, Revalue assets], the amount of depreciation adjustment is calculated and recorded.

  • Basic_amount

    The basic amount of the fixed asset used to compute depreciation. This amount is always registered in the currency of the asset book linked to the asset. For journalizing this always needs to be the default currency of your company. The basic amount is, in principal, the purchasing value, possibly corrected by the revaluations.

  • Calendar-periods

    The number of periods in a calendar.

  • Current period

    The current period.

  • Current_quantity

    The current quantity of a fixed asset. This applies to serial assets (always 1) or piece assets (self-defined).

  • Depreciated_so_far

    The cumulative amount of depreciation until the last depreciation.

  • Depreciated_when_entered

    The amount which was already depreciated when the fixed asset was entered in the fixed asset accounting system.

  • Estimated_life_periods

    The number of periods of the estimated life, based on the linked calendar on the estimated life in years.

  • Estimated_life_years

    The number of years of the estimated life.

  • Financial_years_first_depr

    The financial year when the fixed asset is depreciated for the first time.

  • Financial_years_last_depr

    The year when the fixed asset is depreciated for the last time. This is usually the current financial year.

  • Insured_value

    The value according to the appraisal of the insurance company.

  • Percentage_per_year

    The percentage that can be determined per year in the index table for manual percentages. See [Creating index tables] above.

  • Period_first_depr

    The period when the depreciation starts within the linked calendar.

  • Period_last_depr

    The period when the depreciation was done last, within the linked calendar.

  • Periods_depreciated

    The number of periods in which depreciation already took place counted from the period and year of purchase.

  • Purchase_price

    The value of purchase of the fixed asset.

  • Salvage_value

    The value of the fixed asset after its estimated life.

  • Subsidy

    Subsidy or other amounts received from the government.

  • Units_of_production

    The total amount of production units that the fixed asset can achieve during its estimated life.

  • z_admin

    The company number of the current company.

  • z_today

    Today's date

  • z_user

    The current user.

Exact Fixed Assets includes the following functions:

  • Absolute value
  • Difference between dates
  • Logical expressions
  • Logarithms
  • Integer
  • Maximum
  • Minimum
  • Etc.

You can also add, subtract, multiply or divide by using the standard signs (+, -, *, /). You can use all fields and functions, to create your own depreciation formula.

  • The result of the formula you are creating is always the "Depreciation costs per period".

Example

Depreciation costs per period : (Basic amount - Salvage value) /

Estimated life in periods.

The purchase is reduced with the salvage value, divided through the total number of periods of the complete estimated life of a fixed asset. If the purchase were EUR 100,000,-, the salvage value EUR 10,000,- and the estimated life four years of 12 periods (48 periods), EUR 1875,- ((100,000-10,000)/48) is depreciated. The amounts are always in the currency of the asset book linked to the fixed asset. For journal entries this needs to be the default currency of the company.

Maintaining calendars

The time during which a fixed asset is depreciated is divided into periods. The calendar is used to define the depreciation periods over which the fixed asset is depreciated. The depreciation calendar is used to define whether the depreciation should be recorded weekly, monthly, quarterly or annually. The depreciation calendar states the number of depreciation periods per financial year. The periods of the calendar which are used as basis for journalization of the depreciation should be equal to the periods of the financial company and the period-date table in Exact Finance. Maintain calendars in: [Assets: Master data, Maintenance, General, Calendar].

Example

If you want to depreciate quarterly, you will need to create a calendar with 4 periods a year.

  • If a calendar has not been defined for a certain year, you cannot depreciate fixed assets.
  • When calendars have been used for depreciation, they cannot be changed anymore.

A calendar is linked to an asset book. See [Maintaining asset books] below. By linking an asset book to an asset set, all fixed assets of this set will be depreciated according to the same calendar.

Maintaining departments

In Exact Financials, you can indicate which departments are the fixed assets belong to.  When you are creating fixed assets, you can link them to a department.  Departments can be created in [Assets: Master data, Maintenance, General, Departments].

Maintaining locations

In Exact Financials, you can indicate where the fixed assets are located. When you are creating fixed assets, you can link them to a location.  Locations can be created in [Assets: Master data, Maintenance, General, Locations].

Maintaining asset books

Exact Fixed Assets allows you to use multiple valuation standards simultaneously. For each valuation standard an asset book should be created. If an asset set is linked to an asset book, the depreciation method and table are indicated. A fixed asset linked to an asset set will be depreciated in the linked asset books. Each asset book has its own depreciation method, and therefore a different depreciation result will be reached.

If fixed assets need to be valued in multiple currencies, you should create separate asset books for each currency.

Create asset books in [Assets: Master data, Maintenance, General, Asset book]. Only one asset book will be used for actual depreciation. From the depreciation costs calculated in this book, entries will be created in the general ledger of the linked financial accounting system. This asset book is the "Posting book". You can create only one posting book. The posting book always uses the base currency of your financial accounting system.

Creating properties for assets

There are two ways in which you can create properties for fixed assets. The first way is you can do this in [Finance: Tables, Maintenance, Properties]. You then need to choose {Asset} in 'Entity type'. The other way is you can link the properties to fixed assets when creating a fixed asset in [Assets: Master data, Maintenance, Assets, Assets], but only when the fixed asset is already activated.

You can retrieve reports on properties in [Finance: Tables, Reports, Properties] and in [Assets: Master data, Reports, Assets, Assets].

Creating asset groups

Fixed assets are registered at three levels. An assets group is the top level and needs to be created first. The fixed assets need to be divided into groups, such as cars, buildings, plant and machinery. The asset group data applies to all the fixed assets that belong to the same asset group. If the asset application is linked to a general ledger, the financial data is recorded per asset group. This means that general ledger accounts need to be created for each group of fixed assets in the financial accounting system. See [Setting up a fixed assets accounting system].

Maintain assets groups in: [Assets: Master data, Maintenance, Assets, Asset groups].

In general the grouping of fixed assets in general asset accounts has to be done consistently. Each general ledger account must include only fixed assets that:

  • have the same applicable depreciation method
  • have the same estimated life
  • have the same applicable convention
  • are put into operation by the tax payer in the same tax year and therefore have the same depreciation behavior.
  • are depreciated in the same way following local regulations.

In some countries, the rules are less strict when establishing general asset accounts in the financial accounting system.

Fixed assets are grouped in asset sets created in [Assets: Master data, Maintenance, Assets, Asset sets] before they are grouped in an asset group.

Creating asset sets

In Exact Fixed Assets, fixed assets are registered at three levels. First, you have to create the asset groups in [Assets: Master data, Maintenance, Assets, Asset groups]. Each asset group consists of asset set codes created in [Assets: Master data, Maintenance, Assets, Asset sets]. An asset set contains information that applies to all fixed assets in the asset set. On asset set level you can define the number of linked asset books in which you can then define which depreciation method is applicable per asset book.  Characteristic to each fixed asset within an asset set are the asset books and the linked depreciation methods.

Fixed assets of one asset set are depreciated in the same way in both the posting book and the fiscal asset book during the estimated life.

Fixed assets in asset sets are grouped by:

  • the same characterization of general properties (one piece or bulk)
  • use of the same depreciation method (both economic and fiscal)

Creating assets

After creating asset groups and asset sets, you can register your fixed asset units in [Assets: Master data, Maintenance, Assets, Assets]. At the most detailed level (third level), you enter the data concerning the actual fixed assets. See [Setting up a fixed assets accounting system]. The fixed asset that you are now creating is the actual fixed asset that you are going to depreciate.

Once all fixed asset master data has been entered, you may want to view all important master data without to starting different functions. Reports can be used to view the most important master data and financial data per fixed asset. By using the report functions it is possible to view data such as depreciation and transaction data, but also notes entered per fixed asset. Use the sub-menu functions of [Assets: Master data, Reports, Assets] and [Assets: Master data, Reports, General] to check if the fixed assets master data is entered correctly.

Troubleshooting

  • How do I enter partly depreciated fixed assets?

    If you have registered your fixed assets in another system than Exact Finance so far, you can enter the already depreciated amount of the fixed asset, during registration of your fixed assets. This amount can be used as a field in your depreciation formula.

    Enter the already depreciated amount of the fixed asset manually in the right field, during registration of the fixed asset. Also you can enter the historical amount of purchase, the salvage value and the remaining life span of the fixed asset. (Make sure you enter the number of periods to be depreciated (given the linked calendar) and not the historical life span). After collecting this data, you can enter the relevant fields with the correct data in the 'Depreciation' tab in [Assets: Master data, Maintenance, Assets, Assets].

    Customers that have used the Fixed Assets module within Exact Finance so far, can convert their data to the new Fixed Assets module by starting the necessary conversions.

  • I have purchased a new fixed asset. How do I record it in my financial and fixed assets accounting system?

    Fixed assets that you want to record the transactions of in your financial journals in Exact Finance, should be registered in the purchase journal. If you have marked your purchase account as an assets account in [Finance: Ledger, Master data, Maintenance, General ledger accounts], an input screen appears after finishing the purchase entry. See [Entering invoices for debtors and creditors].

    Here you should enter the asset set and the unique asset code. Besides that you can enter the description of the fixed asset and a quantity for the bulk asset, if the general ledger account is marked as a 'quantity' account. The fields 'creditor' and 'receipt number' are filled according to the data in the purchase journal. After the initialization phase of the fixed asset, the fixed assets administrator has to complete the fixed asset master data for the newly purchased fixed asset by entering, for example, the estimated life and amount of the first depreciation in [Assets: Master data, Maintenance, Assets, Assets]. At this stage the fixed asset can be activated in [Assets: Management, Activate assets] to be included in the depreciation process.

    Take note, the fixed assets can also be initialized and registered within Exact Fixed Assets directly. You can do this by registering the fixed asset directly in [Assets: Master data, Maintenance, Assets, Assets]. No financial transaction is created in Exact Finance if you use this procedure!

Creating depreciation tables

The depreciation method of fixed assets can be defined in two ways. You can either depreciate fixed assets according to the depreciation formula or, you can calculate the depreciation costs for an individual fixed asset by using a depreciation table. Depreciation tables enable you to define depreciation manually. Depreciation formulas are used for depreciating a great number of fixed assets simultaneously. A depreciation table is meant for a single fixed asset that is in a unique position. If you create a depreciation table for a fixed asset that has been partially depreciated, the manually created depreciation table (given the asset book) is used instead of the defined depreciation formula. Maintain depreciation tables in [Assets: Master data, Maintenance, Assets, Depreciation tables].

  • In most cases, depreciation formulas are easier to configure than a depreciation table. It is therefore advisable to examine the various depreciation formulas carefully, before you start using the depreciation table.

Fixed Assets Manual > Contents > Creating master data and defining settings

     
 Main Category: Support Product Know How  Document Type: Support - On-line help
 Category: On-line help files  Security  level: All - 0
 Sub category: General  Document ID: 18.359.302
 Assortment: Exact Financials  Date: 12-12-2008
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