basic fixed assets

EX FIXED ASSETS LEARNING GUIDE

Compatible with EX Version 4.x

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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

GL Accumulated Depreciation Summary Report ................................................................................ 54 CIP Summary Report .......................................................................................................................... 54 Disposition of Assets Report ............................................................................................................... 54 Fixed Asset Information Report........................................................................................................... 54

Chapter 11: Security .......................................................................................................................... 55 Objectives................................................................................................................................................ 55 Assigning Security ................................................................................................................................... 55

EX Fixed Assets Learning Guide

Chapter 1: Introducing the Guide 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.

EX Fixed Assets Learning Guide Page 9

Chapter 2: Explaining the Course This chapter will provide an overview of the topics that will be addressed during the length of the course. Agenda

Review the fixed asset life cycle View the Accounts Payable and General Ledger modules as they relate to purchasing an asset Designate a fixed asset account type in General Ledger Create an invoice Create an asset Review and post an asset Set up an asset Review depreciation types Maintain an asset Retire, sell, or fully depreciate an asset Module security

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).


Chapter 3: Business Office Overview 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.


There are three major stages with specific types of ledger accounts that are commonly used for a fixed asset:

Acquisition Stage

Fixed Asset Account contains the original cost of all of the assets of that particular type and will usually be identified with a debit balance.

Depreciation Stage

Accumulated Depreciation offsets the amount of a Fixed Asset Account and the difference between them is the book value of the asset. While Accumulated Depreciation is identified with a credit balance, it is recorded in the Assets section of the balance sheet. Depreciation Expense keeps track of the expense that is charged each time for the use of an asset. While utilized at the department level, depreciation expense is more commonly tracked as a net amount for a specific area of operation or an entire fund. This type of account normally carries a debit balance.

Retirement/Disposal Stage

Gain/Loss on Sale of Assets accounts are used to record either the net gain or loss when an asset is disposed of or sold; therefore, the account may either carry a debit or credit balance depending on the gains or losses for a year.

Fixed Assets Quick Start Reference These steps provide a quick look at using Fixed Assets further details are provided within the context of this learning guide.

1 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

2 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

3 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

4 In the Fixed Assets module, configure your Asset Class values to identify groups of

assets o Go to the Asset Class window

5 In the Fixed Assets module, configure your Asset Depreciation Type values (straight-

line or declining base method) o Go to the Asset Depreciation Type window


6 In the Fixed Assets module, configure your Asset Departments o Go to the Asset Department window o If the department code from the Depreciation Expense and Gain/Loss Accounts do not

match, you will receive an error message

7 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.

There are two options here:

An account can be identified as NOT an FX Account (which means the account is not relevant to the module and therefore will not even be displayed as an option in Fixed Assets).

An account can be identified as Fixed Asset (Cost), Accumulated Depreciation, Cash/AR, or Debt. These sub-categories will determine where the account appears from a dropdown menu in Fixed Assets.


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:

Straight-line An equal amount of depreciation expense is assigned to each year of asset use. Depreciable cost is divided by useful life in years to determine the annual depreciation expense.

Declining-balance An accelerated depreciation method that uses a constant percentage rate applied to the previous years value rather than to the original cost. Assets decline in value immediately and then depreciation is based on the preceding value of the asset.

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

Asset Type Codes are predefined and cannot be changed. You can generate depreciation on assets in Fixed Assets and record the depreciation in General Ledger by using the Depreciation Expense Transfer feature. If you choose to depreciate on a quarterly or annual basis, it MUST still be processed in monthly intervals. If the asset has been fully depreciated up to its appraisal value, the status in the Asset Master table will automatically be updated to F (Fully Depreciated). Processing will occur after setting up fixed asset items. If the depreciation function is used, you will need to configure and set up controls and default values in the Asset Department, Asset Class, and Assign Permissions to Assets (Asset Security) tables as well as identify depreciation methods. When your items have been entered into the system, the identified depreciation will be used to generate the expense transactions for General Ledger. You can override an item to modify its depreciation calculation and, when an item becomes fully depreciated, the depreciation schedules become inactive.


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

3 Maintaining an Asset

4 Depreciating an Asset

5 Retiring, Selling, or Fully Depreciating an Asset


Chapter 4: Configuring Your System 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.


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. Using Fixed Assets This configuration is done in the Common module.

1 Go to the Maintain Config Table window

2 Locate the FX Module and FX Setup function

3 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

4 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.


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 Go to the General Configuration window

2 Identify the Fixed Asset Department component

3 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.


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

2 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

3 Click Save


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 Go to the G/L Accounts window


2 Select each GL account number that will be made available in Fixed Assets

3 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

2 Right-click and select Add Row option

3 Identify the five-character codes that you will use for Asset Class and enter a description

4 Click Save


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

2 Enter a type, description, and choose its corresponding method

3 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.


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

2 Right-click and select Add Row

3 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)

4 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)

5 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)

6 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.


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

2 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.


Chapter 5: Purchasing an Asset This chapter will provide a step-by-step process for purchasing an asset using Accounts Payable.


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

Creating an Asset in Accounts Payable Begin by creating a new invoice in Accounts Payable.

1 Go to the Create Vendor Invoices window

2 Click on the New button on the bottom left of the window the Invoices window will open with the Header tab active


3 Enter basic information such as ID number (vendor), subsidiary code, invoice

number, amount of invoice, payable date, etc. o You must enter a Subsidiary Code, Invoice Number, Amount, and Transaction Date o For the purpose of illustration, we will create an invoice for a new laptop computer in the

amount of $1,200 purchased from Staples.

4 Click Save

5 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.

6 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

Accounting principles tell us that we should select a balance sheet account.


7 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

8 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.

9 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.


Reviewing the Asset Now we will take a look at this asset in Fixed Assets. Before capitalizing an asset, you will need to be aware of accounting rules and procedures so that an asset can be properly determined. In this regard, you may want to take a look at the details that were entered by the person who originally entered the asset in Accounts Payable.

1 Click Yes to view a list of all the assets that were created through Accounts Payable as illustrated here:

2 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:


3 You may change any of the information on this window that is available for editing and click Save

If an invoice is posted to an incorrect fixed asset account number, your general ledger will not match up with the fixed asset. Notice that once the asset has been placed into another status other than Review, it is no longer displayed on the Review New Assets from AP window:

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 Select an asset and click on the Reject Asset button

5 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


Department Allocation Tab Lets take a closer look at the Asset Maintenance window, using the same example that was illustrated earlier. Basic information that was entered through Accounts Payable when the asset was originally created will be transferred over to Fixed Assets. Notice that there are several tabs available from the Asset Maintenance window that will enable you to track important details about the asset. For example, the Department Allocation tab allows you to view the percentage of the asset that has been allocated to each account when the asset was created. You can change this percentage at any time on the Department Allocation tab:

1 Right-click and select the Add Row option

2 Select a department and change the percentage for each row

3 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.


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 Purchase Information Tab Click on the Purchase Information tab for the Office Supplies asset:

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. Only invoices will be displayed on this tab not journal entries. CIP assets will continue to accumulate costs against a particular asset and, once the project is completed, you can change the status from CIP to Depreciating and actually set up the asset. When the asset has been purchased, an invoice has been created, and the asset has been sent over to Fixed Assets, you will now begin the second phase of the fixed asset life cycle that is, setting up an asset.


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

2 Highlight the asset that should not have been created and click on the Reject Asset button

3 The Reject and Reclassify Asset window will be displayed along with a list of the

transactions that were created as part of this asset

4 Highlight the transaction(s) that need to be removed and click on the Reject Asset button


5 Another window will be displayed asking you to verify that the asset should be rejected

6 Click Yes

7 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.


8 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

9 Highlight the row and click on the Edit button

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.


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.


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.


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.


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) Is used when an asset is in the process of depreciating or decreasing in book value.

Non-Depreciating (P) Should be used for assets that do not depreciate (such as land).

Fully Depreciated (F) 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) Indicates that an asset has been disposed of at no monetary value. Once an asset has been retired, the status cannot be changed.

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.


Required Information for Each Status W CIP N D P F R S V

Asset Cost x x x x x x x x x

Acquisition Date x x x x x x x x x

Purchased Outright x x x x x x x x x

New or Used x x x x x x x x x

Asset Class x x x x x x x x x

Asset Type x x x x x x x x x

Asset Account x x x x x x x x x

Accumulated Depreciation x x x x x x

Depreciation Begin Date x x x x x

Depreciation End Date x x x x x

Depreciation Type x x x x x

Salvage Price x

Salvage Date x

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 Go to the Asset Maintenance window

2 Right-click on the Asset Number/Description field and use the Asset Master Lookup option for the next available number

3 Click Yes when the prompt window asks if you want to create a new asset


Asset Settings

1 Enter the Asset Cost and Acquisition Date

2 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

3 Enter a Donor ID if a donor is associated with the asset

4 Use the appropriate checkbox to identify whether this asset is New or Used

5 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.


Account Codes

You can determine the specific balance sheet accounts for which assets can be assigned.

1 Right-click on Asset Account and select Account Number List o The accounts that are displayed are the same accounts that you designed in General

Ledger configuration earlier as being Fixed Asset accounts

2 Right-click on Accumulated Depreciation Account and select Account Number List o This will be utilized when you begin to depreciate an asset. As with the previous field, only

those accounts that were identified as being Fixed Asset accounts will be displayed.


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).


3 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.

4 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.

5 Depreciation Partial Period Election provides three options:

o Whole Month items are depreciated equally for each month; however, if an item is purchased in June and your fiscal year begins in July, this option will depreciate the item for the month of June and then equally for each month in the next fiscal year. The final year of depreciation will only utilize 11months since the first month was already used in the first year.

o Whole Year if an item is purchased within the first six months of the year, the entire year of depreciation will be taken; whereas if the item is purchased within the last six months of a year, no depreciation will occur for the first year.

o Half Year if an item is purchased within the first six months of the year, a half year of depreciation will be taken; whereas if the item is purchased within the last six months of a year, no depreciation will occur for the first year.


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.


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 Viewing Asset Maintenance Lets take a look at the Asset Maintenance window for the purpose of this illustration, we will view an asset that is in the Depreciating status.


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 Click on the Department Allocation tab

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 Depreciation tab

3 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.


4 Click on the Purchase Information tab

5 Click on the plus signs to expand each row until you see a tree view similar to the illustration above

6 You can view specific details related to the actual purchase of the asset

7 Click on the User Fields tab

o You can add your own customized fields to track specific information o In order to utilize this functionality, your database administrator (or another person with the

same level of knowledge) as well as advanced InfoMaker capabilities will need to add these columns to the ASSET_MASTER_UDF table and then customize the form. These instructions are beyond the scope of this document.


Chapter 8: Check Reconciliation This chapter will explain how to utilize the process of depreciating assets.


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

Balancing your accounts The next phase includes depreciating an asset. Consider the following:

You determine the accumulated depreciation and depreciation expense accounts that are available in Fixed Assets

You may define more than one depreciation expense account to which depreciation can be assigned

Use the Department Allocation tab to assign assets to departments and depreciation expense accounts

Depreciation Types are configured so that the useful life and depreciation manner can be quickly selected for each asset

Deciding on the method of depreciation and length of time to depreciate an asset is governed by Generally Accepted Accounting Principles (GAAP)

First year bonus, residual value, and previous depreciation that is assigned by another system will affect the calculated depreciation

Assets must be in a Depreciating status before depreciation can begin Use the Depreciation Expense Transfer window to run depreciation on an asset You can depreciate all assets or a single asset on a month basis If you choose to depreciate on a quarterly or annual basis, you must also run monthly depreciation

at those intervals Use the Depreciation tab on the Asset Maintenance window to review depreciation on an asset Depreciation is sent to the General Ledger for posting in a batch Batches can be deleted if needed and you can then re-run depreciation in Fixed Assets When a batch is deleted, the Depreciated Through date will change on each asset to reflect the

last depreciation


Reviewing the Depreciation Process You can calculate depreciation in Fixed Assets for a fiscal month and record that amount in General Ledger. Since every asset must possess a depreciation entry for each month of the year, you should run this process on a monthly basis. All assets must be in a Depreciating status.

1 Go to the Depreciation Expense Transfer window; when the window opens, you will see that the window is divided into three steps

2 Step One: Select Depreciation Options o Select whether you want to run the transfer for all assets, or you can select a single asset o Choose the corresponding radio button to run the depreciation monthly, quarterly, or

annually Notice that if you choose to run depreciation monthly, you will have to wait until the beginning of the next quarter or year to change the

o Select the fiscal month for which the depreciation will be calculated Notice that the last month for which the calculation occurred will be indicated you may not skip a month due to special rules that may have been identified (such as first year bonus or half year option) and these factors need to be considered for the current month


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 Step Two: Calculate Depreciation and Review o Select the report format if you are using InfoMaker, you can click the Customize button to

modify your report o Type the title of your report in the Report Name section o Select Print if you want to automatically send the report to your printer, or select Preview to

see a print preview your report


4 Click the Review Depreciation button o This button will generate a preliminary report of depreciation calculations o Review the report before sending the depreciation journal entries to General Ledger

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.


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 Step Three: Calculate Depreciation and Send To GL o Select or type a GL Batch Date

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.

6 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.


Your report will now resemble this:

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 Go to the Transaction Groups window

2 Locate transaction Group Number 106 (notice that this group is currently in Suspended status)

3 Click on the Edit button


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.


Chapter 9: Retiring, Selling, or Fully Depreciating an Asset

This chapter will explain the last step in the life cycle of an asset that is, reaching the end of its depreciation.


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 Right-click on the Asset Number/Description and select the asset

3 Click on the Status drop-down menu and select Sold


4 Enter the Sales Price and Sale Date, which has now become editable

5 Enter a Receivable/Cash for Sale Account (this is where the money received from the sale of the item will be applied)

6 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.


Chapter 10: Reports This chapter will introduce you to the reports that are available within Fixed Assets and how you can use these reports to extract information about depreciation expenses, accumulated depreciation, CIP accounts, and disposition of assets.


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

Fixed Assets Summary Report This report will list all active assets that exist within an account number with a total amount

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.


GL Depreciation Expense Summary Report Select a range of time to view the depreciation expense on an asset by asset basis. You should be able to run a GL trial balance and the amount totals should match up with the total amount displayed on the report. In fact, you will probably even see the same line items. GL Accumulated Depreciation Summary Report Select a range of time to view the accumulated depreciation, which adds up all of previous Fixed Assets depreciation numbers.

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. CIP Summary Report Select a range of time and this report will display the invoice number and asset amount that has gone into each building that is currently under construction. A total for each building will be shown as well as a total for the actual CIP account, which should reconcile back to your general ledger. This information will be extremely useful for an auditor. Disposition of Assets Report When you enter or select search criteria (Fiscal Year, Report Title, and Reports) and click OK, a report listing all assets that were sold, salvaged, or retired in the fiscal year selected is displayed on the report. Fixed Asset Information Report Shows all fixed assets along with acquisition date and last depreciation run date. This report window contains selection criteria including Status, Asset Account, Asset Class, Asset Department, and Asset Number. The Fixed Asset Information Report is very analytical and customizable. Almost everything that is displayed on the Asset Maintenance window can be included on this report and statistical data can be sliced and diced according to the information you would like to see displayed on the report.


Chapter 11: Security This chapter will explain how to assign specific groups to view and/or modify information within Fixed Assets.


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 Go to the Assign Permissions to Assets (Asset Security) window

2 Use the drop down menu to select a Group ID these are the groups that have been set up using Task List

3 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

4 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.

EX Fixed Assets Learning GuideChapter 1: Introducing the GuideChapter 2: Explaining the CourseObjectivesSummary

Chapter 3: Business Office OverviewObjectivesFixed AssetsFixed Assets Quick Start ReferenceBusiness Office

Chapter 4: Configuring Your SystemObjectivesConfigurationsUsing Fixed AssetsDepartmentsPosting AssetsAccountsAsset ClassDepreciation TypesAsset DepartmentsAsset Security

Chapter 5: Purchasing an AssetObjectivesPurchasing ProcessCreating an Asset in Accounts PayableReviewing the AssetDepartment Allocation TabDepreciation TabPurchase Information TabCase Study

Chapter 6: Setting Up an AssetObjectivesSetup ProcessStatusAsset SettingsAccount CodesDepreciation Settings

Chapter 7: Maintaining an AssetObjectivesMaintenance ProcessViewing Asset Maintenance

Chapter 8: Check ReconciliationObjectivesBalancing your accountsReviewing the Depreciation ProcessDepreciating Assets

Chapter 9: Retiring, Selling, or Fully Depreciating an AssetObjectivesDisposal ProcessDisposing of an AssetMaintenance

Chapter 10: ReportsObjectivesReportsFixed Assets Summary ReportGL Depreciation Expense Summary ReportGL Accumulated Depreciation Summary ReportCIP Summary ReportDisposition of Assets ReportFixed Asset Information Report

Chapter 11: SecurityObjectivesAssigning Security

basic fixed assets

Documents

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use of information

updated information

proprietary information

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table of contents chapter

business office overview