Entering Asset Transactions

Asset acquisitions, revaluations and other asset related transactions are all entered using SunSystems Ledger Entry (LEN) or Ledger Import (LIM). The fixed asset transaction you enter posts to both the balance sheet chart of accounts code for the asset in Financials, and to the appropriate asset code in the Fixed Assets Register.

Asset related transactions must be entered with the asset code, asset subcode and asset indicator on the journal.

  • The asset code identifies the asset in the Fixed Asset Register.
  • The asset subcode is optional and identifies an asset posting preset which contains a set of default transaction analysis codes.
  • The asset indicator is important because it identifies how the asset value will be updated by the transaction amount.

See 'How are the Asset Values Updated?'

Before you enter a ledger transaction to record an asset acquisition, you may need to:

  • set up the new asset in the Fixed Assets Register using Asset Records (FAS)
  • set up a new corresponding budget asset using Asset Budget Details (FAB)
  • set up a new balance sheet account for the asset in the Financials ledger using Chart of Accounts (COA).

Optionally, you can also enter an asset quantity in the Memo Amount field. In order to record asset quantities in Ledger Entry (LEN) the following configuration must previously have been defined:

  • Use Asset Quantity option on the General tab of Ledger Setup (LES) must be checked
  • Non-Currency Value Post Rule on the Memo Value tab of Business Unit Setup must not be set to Undefined
  • Memo Post Rule Override field in Journal Types Setup (Posting Overrides) (JDX) must not be set to Undefined.

Further information is available in 'Entering the Journal Details' and 'Ledger Entry Asset Details'.

The Effect of Depreciation Locking

You can lock the depreciation accumulated to date. If you do this, the straight line depreciation calculation for each asset is calculated as the asset's net value divided by the number of depreciation periods remaining for the asset.

Example

In a 12 period accounting year, an asset purchased in 07/2007 with a gross value of 2600 Euros is depreciated until 11/2011 at straight line 20% at 43.34 Euros. Check the check box Lock Calculated Depreciation in Ledger Setup (LES), and change the asset percentage to 12.5%.

Run Depreciation Calculation (FDC) historically for period 06/2012. The calculated depreciate charge is now 7.05 Euros. This new depreciation charge is calculated as follows:

100 / 12.5% x 12 = 96

As 52 of the 96 periods have already been depreciated, the remaining 43 periods are then depreciated at the new percentage.

Example

Asset net value / depreciation periods remaining = new depreciation charge.

The Effect of Depreciation Locking Combined with Adjustments to Gross Value

When working with Depreciation Locking switched on in Ledger Setup (LES), you should first run the depreciation calculation for all of the previous periods before manually posting any adjustments to the gross value of an asset in the current period. However, when an asset value is increased (or decreased) using a V Marker in Ledger Entry (LEN) and Ledger Import (LIM), a warning message is displayed if the depreciation is not up to date. This is so that the revised depreciation takes effect only from the accounting period of the revised value.

Manually Posting a Depreciation Amount

Under normal circumstances it is not recommended to manually post a depreciation amount to an asset using Ledger Entry (LEN). This is because posting a depreciation transaction to an asset in a particular period then excludes the asset from the Depreciation Calculation (FDC) for that period. If the amount you post is not in line with the asset's depreciation rate, gross value and number of periods depreciated, then depending on the specific circumstances, the subsequent period's depreciation calculation might include an amount to compensate for the change. You can suppress this compensation amount for all assets by checking the Lock Calculated Depreciation check box on the Ledger Setup (LES).

However, it may be appropriate to manually post a depreciation amount to an asset under the following circumstances:

  • You are posting a depreciation amount that correctly brings the accumulated depreciation into line with the depreciation rate, gross value and number of periods depreciated. For example, posting the accumulated depreciation of an asset that you are migrating into SunSystems.
  • You are posting the depreciation to an asset that is excluded from the depreciation calculation, for example if its depreciation method is defined as no-depreciation on the Value tabs in Asset Records (FAS).
  • You are posting a manual correction or adjustment to the accumulated depreciation of an asset, for example, in an asset revaluation. In this case it is usually necessary to also adjust the gross value (using an additional journal), the percentage or the start period of depreciation in Asset Records (FAS), so that the manually posted depreciation is not reversed by the depreciation calculation in the following period.

In addition to standard depreciation, if you are using enhanced depreciation you can post manual adjustments for advanced and reduction depreciation. You must use specific journal types for each, which must first have been created in Journal Types (JNT), with the Asset Depreciation Type option set to Standard, Advanced or Reduction, as appropriate.