Asset types

Asset types are groups of assets that are categorized by similar characteristics. Asset types define the kind of asset (building, auto, and so on), type of property (personal, real estate, land, and so on), and the posting accounts used during asset processing. The primary purpose of asset types is to provide default accounting information.

General Ledger accounts

Three General Ledger accounts are associated with asset types:

  • Asset account

  • Accumulated depreciation account

  • Depreciation expense account

These accounts provide default information for the General Ledger transactions associated with depreciation calculations and can be used to create journal entries associated with adding, adjusting, transferring, or disposing of assets. You define these General Ledger accounts when you define asset types.

General Ledger account information is required for every asset type, but not for asset subtypes. If you do not specify account information for an asset subtype, the account information defined for the subtype's asset type is used.

Examples

Characteristics you might use to categorize asset types include asset life, general ledger accounts, depreciation method, function, use, and so on. Common examples of asset types are furniture-and-fixtures, vehicles, computers, and lease-hold improvements.

How are asset types used?

Asset types are user-definable, and are defined by company. At least one type must be defined for each company you use in the Asset Management application. Every asset must have an asset type that categorizes the asset for reporting purposes and determines which General Ledger accounts are used for asset, accumulated depreciation, and depreciation expense amounts.

Because asset types are used both for reporting and accounting purposes, you must plan the asset types carefully for your reporting and General Ledger processing needs.

Note: Details on defining an asset class reporting structure are found elsewhere in this user guide.

How do I select an asset class reporting structure?

If you use Part 32 books to report on asset class depreciation, you use types as the cornerstone of the asset class reporting structure, and you must define types that are used solely by asset-class assets. An asset class must be associated with a unique asset account defined either for a type, or for a type and subtype or for a type, subtype, and accounting unit. Lawson highly recommends that the disposal accounts you specify for the account group associated with the asset class match the accumulated depreciation account specified for the asset class type.