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Creating Fixed Assets

You use the fixed asset record to track the information about a specific fixed asset. The fixed asset profile tracks the following information:

Number: Unique e-automate or user-assigned number.

Description: Description of the fixed asset.

Asset code: Code associated with the fixed asset that identifies the fixed asset and accumulated depreciation accounts and depreciation method (Straight Line, 200% Declining, or 150% Declining). The asset code also pre-populates the depreciation code that identifies which expense accounts and departments are affected during depreciation. This selection also populates the depreciation cycle, and the recovery period.

Depreciation code: Code that defines the expense account department combinations to which e-automate posts depreciation expenses.

Item: The inventory item number from your item list, if any. You choose whether or not you identify an item. If you identify an item number that has an equipment code, e-automate activates the Equipment field.

Equipment: Activated when you select an item that has an equipment code. You use this field to identify an equipment record from your equipment list.

Serial number: If you identify an equipment, e-automate displays the serial number associated with the selected equipment. If you do not select an item, you can simply enter the serial number in the field for a non-item fixed assets like a vehicles.

Acquired date: Date you acquired the fixed asset.

Activated date: Date you activate or began depreciation of the fixed asset.

Disposal date: Date you disposed of the fixed asset. This field is populated when you do a disposal adjustment.

Depreciation cycle: The cycle you use to depreciate this fixed asset.

Depreciation period: Fixed assets are depreciated over time, based on the cycle identified on the fixed asset. The depreciation period is the current period for which you are depreciating this fixed asset.

Cost or Basis: Original value associated with the fixed asset. This value is populated when entering beginning balances, doing fixed asset adjustments, using the import spreadsheet, using an accounts payable vendor invoice, or inventory fixed asset transfer.

Accumulated Depreciation: Amount of depreciation posted for the fixed asset. This value is populated when entering beginning balances, doing fixed asset adjustments, using the import spreadsheet, using an accounts payable vendor invoice, or inventory fixed asset transfer.

Unrecovered basis: Amount of the fixed asset value remaining that has not been depreciated. This field is automatically calculated based on the Cost or basis and the Accumulated depreciation field values.

Recovery period: The number of months over which you intend to depreciate a fixed asset.

Tax cost or basis: The Tax Cost or basis field is matched by e-automate with the Book Cost or basis field.

Tax Accumulated depreciation: Amount of accumulated depreciation that you have recorded for tax purposes. e-automate allows you to track book and tax separately due to separate methods allowed by different jurisdictions. Some jurisdictions allow more rapid depreciation for tax purposes than is allowed by Generally Accepted Accounting Principles (GAAP). If you are using other methods for tax you can calculate outside of e-automate and record in e-automate for tracking.

Tax accumulated depreciation: Amount of accumulated depreciation you have recorded for tax purposes.

Tax unrecovered basis: The difference between the Tax Cost or basis and the Tax Accumulated depreciation fields.

Tax recovery period (months): The recovery period you are using for tax depreciation.

Salvage Value: Amount of value remaining in the asset once you have fully depreciated the asset.

Market Value: Market value of the asset.

Location: Location of the fixed asset. This field is automatically populated if you identified an equipment record.

Fixed assets are traditionally carried on a company’s balance sheet and incrementally depreciated over the recovery period. Depreciation allows a company to post a credit to an accumulated depreciation account, thus reducing the value of fixed assets on the balance sheet and offsetting the depreciation entry against an expense account on the income statement. Depreciation occurs until the asset is fully depreciated or the asset is disposed.

When you dispose of—or sell for cash—a non-inventory fixed asset, e-automate removes the value for the fixed asset as well as the accumulated depreciation associated with the fixed asset. If you make a profit or a loss on the sale of the fixed asset, the difference is usually posted to a net gain or loss account on your income statement (usually an Other Income account type).

If the fixed asset is an inventory item, you can transfer the item from the fixed asset warehouse back to a regular company warehouse and sell it as an inventory item. When you transfer the fixed asset from the fixed asset warehouse to a regular company warehouse, the system brings the item back in at its depreciated value.

When you create fixed assets for inventory-type items, such as a piece of equipment and its associated accessories, you can: 1) create a fixed asset record for each accessory, and individually transfer each accessory to a fixed asset warehouse for depreciation; or 2) let the host consume the accessories, and transfer the single host to the fixed asset warehouse. For more information on consuming accessories, see the Enabling Accessory Consumption topic.

Prior Balances

When coming to e-automate from another software package you will need to enter your beginning balances on your fixed assets. When entering beginning balances for straight line you can simply enter your ending balance from your old software and e-automate can figure out the remaining depreciation amounts based on when the asset was acquired the cost or basis and where the current Depreciation period is field. With the accelerated methods you need to give e-automate more information so it can assume the depreciation. You use the Beginning Balances button to enter your beginning balances. When entering beginning balances you can enter current year and prior year amounts. E-automate determines whether to offer you the prior year balance options based on the dates on the fixed asset. If the Acquired date is in a fiscal year prior to the Depreciation period is field, e-automate displays the prior year balances region in the Asset Beginning Balances window. If the Acquired date and the Depreciation period is field are in the same fiscal year, e-automate only displays the Current year balances region.

Getting to the TransactionGetting to the Transaction

From the Accounting menu, select Fixed Assets > Fixed Assets to display the Fixed Asset list.

Click [New] to open the New Fixed Asset window.

Basic InformationBasic Information

Complete the following fields as appropriate.
Number: Assigned number for the fixed asset. You can override this number and enter your own number.
Description: Brief description of the fixed asset.
Asset code: Use the lookup to select the asset code to be associated with this fixed asset.
Depreciation code: Code specified by the asset code; change as necessary.

Do ONE of the following:

If your fixed asset is associated with a non equipment inventory item, use the lookup in the Item field to select your inventory item.

If your fixed asset is associated with an equipment inventory item, do the following:

Use the lookup in the Item field to select your inventory item.

Use the lookup in the Equipment field to identify the equipment associated with the serial number if any. If there is not an equipment record with which you want to associate your item, leave the equipment field blank.

In the Quantity field, enter the quantity of the item you are associating with this fixed asset.

In the Serial number field, enter your serial number. If your serial number has ever been in stock in e-automate, check the Use system serial number checkbox and use the lookup in the Serial number field to select the serial number.

In the Branch field, enter the appropriate branch.
Note: The Branch field is only displayed when you have branching enabled.

If the fixed asset is not on your inventory item list, do the following:

Skip the Item field.

Skip the Equipment field.

If your fixed asset has a serial number, enter the serial number in the Serial number field.

In the Acquired date field, enter the date you acquired the fixed asset.

In the Activated date field, enter the date you began depreciation of the fixed asset.

Leave the Disposal date field blank, as e-automate populates this field when you dispose of a fixed asset.

In the Depreciation cycle field, the asset code specifies a cycle. Change the cycle as necessary.

In the Depreciation period is field, e-automate identifies the current period through which this fixed asset has been depreciated. You can change this field as necessary to identify the current depreciation period.

Check the Track asset in inventory checkbox to track fixed assets that are currently in your fixed asset warehouse. When this box is checked, the warehouse and bin fields display. Use the Lookup to select the fixed asset warehouse and bin.

In the Tax Accumulated depreciation field, enter the amount you have depreciated for tax purposes.

In the Book Recovery period (months) field, verify the recovery period assigned by the fixed asset code. Change the period as necessary.

In the Tax Recovery period (months) field, enter the period you are using for tax depreciation.

In the Salvage value field, enter the expected value of the asset upon complete depreciation.

In the Market value field, enter the estimated market value upon depreciation.

In the Location field, enter location information.
Note: You can only enter location information for fixed assets not associated with equipment records.

Beginning BalancesBeginning Balances

If you are entering this asset new from another system in which depreciation has occurred you can enter your beginning balances using the Beginning Balances button. Be sure before you begin depreciating the asset you enter your beginning balances. Once you have begun depreciation you cannot access the Asset Beginning Balances window. When entering beginning balances, e-automate uses the date identified in the Date field in the Asset Beginning Balances window to post to the general ledger. If you are entering beginning balances, complete this section. If not skip this section.

Do ONE of the following:

If you are entering prior year and current year balances, do the following:

Click [Beginning Balances] to open the Asset Beginning Balances window.

Check Enter beginning balance information for this asset checkbox to enable the balances fields.

In the Date field, use the drop-down calendar to select the date to start associating the asset beginning balance.

In the region Prior balances, in the Cost basis field, enter the original cost or basis value for this fixed asset.

In the region, Prior balances, in the Accumulated depreciation field, enter how much depreciation accumulated for this asset in the prior accounting year.

In the Account field, use the Lookup to select a clearing account. This account is used by e-automate to assure the transaction balances.

In the Current year balances region, the Accumulated depreciation field, enter the accumulated depreciation for this asset for this year.

In the Account field verify e-automate entered the correct account. You can change this account as necessary.

Click [OK] to save your beginning balances and close the window.

If you are entering current year balances only, do the following:

Click [Beginning Balances] to open the Asset Beginning Balances window.

Check Enter beginning balance information for this asset checkbox to enable the balances fields.

In the Cost basis field, enter the original cost or basis value for this fixed asset.

In the Accumulated depreciation field, enter the accumulated depreciation for this asset.

In the Account field, verify e-automate entered the correct account. You can change this account as necessary.

Click [OK] to save your beginning balance information.

Completing the TransactionCompleting the Transaction

Click [OK] to save the new fixed asset.
Note: You can associate beginning balance value to your fixed assets by using the Beginning Balance functionality found inside the New Fixed Asset window. This is applicable to rapid accelerated methods of depreciation. If you are using straight line depreciation, you can enter your balances in a variety of ways. To associate value (Cost or basis) with your fixed assets you can use several other transactions. See the topics, Importing Fixed Assets, Transferring Inventory to Fixed Assets, Purchasing Fixed Assets, or Adjusting Fixed Assets.