Revalue Fixed Assets

Revaluation of fixed assets can consist of appreciations, write-downs, or general value adjustments.

When the value of a fixed asset has increased, you post a journal line with a higher amount, an appreciation, to the depreciation book. The new amount is recorded as an appreciation according to the fixed asset posting setup.

When the value of a fixed asset has decreased, you post a journal line with a lower amount, a write-down, to the depreciation book. The new amount is recorded as a write-down according to the fixed asset posting setup.

Indexation is used to adjust multiple fixed asset values, for example per general price changes. The Index Fixed Assets batch job can be used to change various amounts, such as write-down and appreciation amounts.

To post an appreciation from the fixed asset G/L journal

Choose the icon, enter FA G/L Journals, and then choose the related link.
Create an initial journal line and fill in the fields as necessary.
In the FA Posting Type field, select Revaluation.
Choose the Insert FA Bal. Account action. A second journal line is created for the balancing account that is set up for appreciation posting.

NOTE
Step 4 only works if you have set up the following: In the FA Posting Group Card window for the posting group of the fixed asset, the Appreciation Account field contains the general ledger debit account and the Appreciation Bal. Account field contains the general ledger account to which you want to post balancing entries for appreciation. For more information, see the "To set up fixed asset posting groups" section in How to: Set Up General Fixed Asset Information.
Choose the Post action.

To post a write-down from the fixed asset G/L journal

Choose the icon, enter FA G/L Journals, and then choose the related link.
Create an initial journal line, and fill in the fields as necessary.
In the FA Posting Type field, select Write-Down.
Choose the Insert FA Bal. Account action. A second journal line is created for the balancing account that is set up for write-down posting.

NOTE
Step 4 only works if you have set up the following: In the FA Posting Group Card window for the posting group of the fixed asset, the Write-Down Account field contains the general ledger credit account and the Write-Down Expense Account field contains the general ledger debit account to which you want to post balancing entries for write-downs. For more information, see the "To set up fixed asset posting groups" section in How to: Set Up General Fixed Asset Information.
Choose the Post action.

To perform general revaluation of fixed assets

Choose the icon, enter Index Fixed Assets, and then choose the related link.
Fill in the fields as necessary.
Choose the OK button.

Revaluation lines are created per your settings in step 2. The lines are created in either the fixed asset journal or the fixed asset G/L journal, depending on your template and batch setup in the FA Journal Setup window. For more information, see How to: Set Up General Fixed Asset Information.
Choose the icon, enter FA G/L Journals, and then choose the related link.
Select the journal with the fixed assets that you want to revalue, and then choose the Ledger Entries action.
Check the created entries, and then choose the Post action to post the journal.

TIP
If the index figures are for simulation purposes only, you can create a special depreciation book to store them in. Then these entries will not affect any of the other depreciation books.

To post additional acquisition costs

You post additional acquisition cost for a fixed asset in the same way as you post the original acquisition cost: from a purchase invoice or from a fixed asset journal. For more information, see How to: Acquire Fixed Assets.

If depreciation has already been calculated for the fixed asset, select the Depr. Acquisition Cost check box to have the additional acquisition cost less the salvage value depreciated in proportion to the amount by which the previously acquired fixed asset has already been depreciated. This ensures that the depreciation period is not changed.

The depreciation percentage is calculated as:

P = (total depreciation x 100) / depreciable basis

Depreciation amount = (P/100) x (extra acquisition cost - salvage value)

Remember to select the Depr. until FA Posting Date check box on the invoice, the fixed asset G/L journal, or the fixed asset journal lines to ensure that depreciation is calculated from the last fixed asset posting date to the posting date of the additional acquisition cost.

Example - Posting Additional Acquisition Costs

A machine is purchased on August 1, 2000. The acquisition cost is 4,800. The depreciation method is straight-line over four years.

On August 31, 2000, the Calculate Depreciation batch job is run. Depreciation is calculated as:

book value x number of depreciation days / total number of depreciation days = 4800 x 30 / 1440 = 100

On September 15, 2000, an invoice is posted for painting the machine. The invoice amount is 480.

If you selected the Depr. until FA Posting Date check box on the invoice before posting, the following calculation is made:

15 days of depreciation (from 09/01/00 to 09/15/00) is calculated as:

book value x number of depreciation days / remaining number of depreciation days = (4800 - 100) x 15 / 1410 = 50

If you selected the Depr. Acquisition Cost check box on the invoice before posting, the following calculation is made:

The additional acquisition cost is depreciated by ((150 x 100) / 4800) / 100 x 480 = 15

The depreciable basis is now 5280 = (4800 + 480), and the accumulated depreciation is 165 = (100 + 50 + 15), corresponding to 45 days of depreciation of the total acquisition cost. This means that the asset will be totally depreciated within the estimated lifetime of four years.

When the Calculate Depreciation batch job is run on 09/30/00, the following calculation is made:

Remaining depreciable life is 3 years, 10 months and 15 days = 1395 days

Book value is (5280 - 165) = 5115

Depreciation amount for September 2000: 5115 x 15 / 1395 = 55.00

Total of depreciation = 165 + 55 = 220

If you did not select the Depr. until FA Posting Date check box, the asset would lose 15 days of depreciation because the Calculate Depreciation batch job run on 09/30/00 would calculate depreciation from 09/15/00 to 09/30/00. This means that when the Calculate Depreciation batch job is run on 09/30/00, the calculation is as follows:

Remaining life time is 3 years, 10 months and 15 days = 1395 days

Book value is (4800 + 480 - 100 - 15) = 5165

Depreciation amount for September 2000: 5165 x 15 / 1395 = 55.54

Total of depreciation = 100 + 15 + 55.54 = 170.54

Revalue Fixed Assets

To post an appreciation from the fixed asset G/L journal

NOTE

To post a write-down from the fixed asset G/L journal

NOTE

To perform general revaluation of fixed assets

TIP

To post additional acquisition costs

Example - Posting Additional Acquisition Costs

See Also