This document describes how you create a customer invoice for the sale of a fixed asset and how M3 Business Engine calculates financial gains and losses per depreciation type at the sale.
The fixed asset sold has status 9='Sold or disposed fixed asset' in 'Fixed Asset. Open' (FAS001). The following documents are printed: a customer invoice, a depreciation report (FAS102PF), depreciation account entries (FAS103PF) and an accounting journal (GLS041PF).
You can send the invoice to the customer. Store the other documents as internal documentation of the sale.
Create invoice for sale of asset
Record the sale of one or several fixed assets in 'Fixed Asset. Sell' (FAS130). For each invoice line, enter the ID of the asset on the H panel, the quantity to be sold and the sales price, the latter in the 'Line amount' field. If you are selling only a part of the fixed asset by entering a quantity lower than the one registered for the asset, the 'New FA' field is displayed where you enter a new fixed asset ID for the part to sell.
The new asset will automatically be registered with the specified quantity and status 9='Sold or disposed fixed asset' in 'Fixed Asset. Open' (FAS001). After the invoice is created, the asset with the original ID will remain in status 1='Normal FA' but the sold quantity is deducted from the original quantity.
Calculate financial gain or loss
M3 Business Engine automatically calculates any financial gain or loss at the sale by using the following formula: sales price minus the acquisition cost retrieved from the value type on the depreciation type, provided that the value type is not the same as is selected in 'Settings – Fixed Asset Acquisition' (FAS900), minus the accumulated depreciation. If the sales value is higher than the result of the formula, then it is a financial gain, otherwise a loss.
Depreciation types in M3 Business Engine represent different depreciation methods. Every depreciation type defines a value type that stores the acquisition cost of the asset, based on which a depreciation plan is created. Several depreciation types can be connected to the same asset. Some depreciation types do not update the general ledger with the calculated depreciations but are used for taxation purposes instead.
The standard value type for acquisition costs is selected in 'Settings – Fixed Asset Acquisition' (FAS900). Often the same value type is selected for the individual depreciation types. However, depreciation types used for taxation purposes may need a different acquisition cost and therefore use a different value type for the acquisition cost than was selected in (FAS900), resulting in different acquisition costs for the same asset. For depreciation types for derogatory depreciation the acquisition cost is always zero, since the acquisition cost is managed by the associated depreciation type.
M3 Business Engine automatically calculates any financial gain or loss at the sale of an asset by using the following formula: sales price minus the acquisition cost retrieved from the value type on the depreciation type, provided that the value type is not the same as is selected in 'Settings – Fixed Asset Acquisition' (FAS900), minus all depreciations made. If the sales value is higher than the result of the formula, then it is a financial gain, otherwise a loss. Gains and losses are calculated per depreciation type and recorded based on accounting rules. The gains and losses recorded are displayed for the asset in 'Fixed Asset. Connect Value Types' (FAS003) in the value types selected for each depreciation type in 'Settings – Fixed Asset Sales' (FAS926).
At the sale, the acquisition cost or costs are reversed. Since the acquisition cost for the same value type should only be reversed once, M3 Business Engine checks whether the value type of the depreciation type is selected in (FAS900). If it is, then the acquisition cost is only reversed for the first depreciation type with this value type for the asset.
A fixed asset will be sold for EUR 50,000. The actual acquisition cost was 100,000, stored in value type 01, which is also the one selected in (FAS900). Another acquisition cost of 160,000 is stored for taxation purposes in value type 02. This table shows the depreciation types that are connected to the asset:
|Depr. Type||Value Tp for Acq. Cost||Acc. Depr.|
|20 (US GAAP)||01||50,000|
A gain and loss will be calculated per depreciation type at sales. Since the value type of depreciation types 10, 20 and 90 is the same as in (FAS900), only the acquisition cost for depreciation type 10 is reversed.
|Line||Acc. Tp||Account entry||Debit||Credit||Account||Depr. Tp|
|4||Acquisition cost reversed (2)||100,000||D|
|5||560||Offsetting debit transaction (5)||100,000||E|
|6||500||Depreciation reversed (3)||40,000||F||10|
|7||545||Financial loss (4)||10,000||E||10|
|8||565||Offsetting credit transaction (5)||50,000||B||10|
|9||500||Depreciation reversed (3)||50,000||G||20|
|10||540||Financial gain (4)||0||H||20|
|11||565||Offsetting credit transaction (5)||50,000||I||20|
|12||Acquisition cost reversed (6)||160,000||J|
|13||500||Depreciation reversed (3)||80,000||K||30|
|14||545||Financial loss (4)||30,000||L||30|
|15||560||Offsetting debit transaction (5)||50,000||M||30|
|16||500||Depreciation reversed (3)||11,000||N||90|
|17||540||Financial gain (7)||11,000||B||90|