Fixed Asset

2014-06-05 AM Fixed Assets

• Fixed Asset Introduction
• 0:01:30 Agenda
• 0:02:15 Fixed Asset overview
• 0:03:15 Managing an ERP installation project as a fixed asset
• 0:03:45 What parts of a fixed asset can be capitalized
• 0:05:45 Accruing expenses over time to ultimately create a fixed asset
  • 0:06:15 Accruing ERP installation expenses before the ERP goes live
• 0:08:15 Fixed asset depreciation
  • 0:10:45 NOTE: I misspoke about the DR. The Debit should be to Depreciation Expense (not Accrual Expense)
  • 0:11:45 how to determine the depreciation amount
  • 0:13:30 Graph of declining balance depreciation method
• 0:14:30 GL accounts used during Fixed Assets
• 0:20:00 Who cares about the Fixed Asset entries on your balance sheet (tax advisors and companies who produce department P&L)
• 0:22:45 Managing Fixed Assets in iDempiere manually (not using the fixed asset feature in iDempiere)
  • Product setup
  • 0:24:30 Demonstration with Product and Vendor Invoice
  • 0:30:00 Using the GL Product column to report on the balance per GL Account per product
  • 0:31:00 Creating your manual depreciation entries
  • 0:37:00 Using external dedicated software to manage high volumes of complex depreciation
  • 0:40:30 Using a PO + MR + VI to add receiving to the process of manually creating a fixed asset
  • 0:46:00 Difference between accruing an asset vs creating the actual asset
• 0:48:30 Managing Fixed Asset using iDempiere's built-in Fixed Asset abilities
  • Asset Group
  • 0:50:15 Product Category
  • 0:51:15 Product
    • Note: I used a Product Type of "Service". Please understand that Product Type "Asset" and Product Type "Service" behave the same from a GL perspective. The Product Type "Asset" is more descriptive and should be used for products that are Assets.
  • 0:54:40 Four options for creating a Fixed Asset
  • 0:56:00 PO + MR + VI
  • 1:01:30 Asset window
  • 1:02:45 Asset Addition
  • 1:05:00 Asset Depreciation
  • 1:07:15 how to specify whether you use UOM to create many assets (One asset per UOM)
• Manual for iDempiere
• Discussion about revaluing an existing asset (both its value and its useful life)

Discussions About the Relationship Between Product and Asset

• Do you have to create a product per asset?
  • No, there can be a one to many relationship between a product and many assets.
    • Example: create 5 assets from an invoice line whose qty = 5.
    • Example: same product invoiced over 5 different invoices.
• Can you create a single product for all assets - even of completely different types?
  • Yes, you can create a dummy Product called "Asset Purchasing".
  • Any time you wish to purchase an asset, use the "Asset Purchasing" Product and add the details to the PO or Invoice description Field.
  • The MR will post according to the Product => Accounting subtab => Product Expense account; however, as soon as the Asset is created from the Invoice, the Product Expense account will be relieved according to each Asset's specific details/accounting. People often map the Product Expense account to a balance sheet fixed assets accrual account.
• Can you add Asset as a posting dimension - yes. Here is an example. Since the Invoice that is used to pay for the asset can be tagged with the Asset, the Product Expense/Accrual posting will also be tagged with the Asset.
  • This is a nice feature for defending the balance of your fixed asset accrual account.
  • It is also a nice feature to be able to recognize expenses against an asset. Examples include maintenance, calibration, etc...
  • Vehicles are a common fixed asset. By adding the Asset as a separate dimension (and not using a charge or product), you can create an invoice line for a maintenance charge and still tag it to the asset. It is a common mistake to try to make vehicles a Product.