Use this information as an aid when implementing IBS Asset Management (ASM).
Introduction
This document contains examples of how the setup of depreciations should be done, and the effect that certain parameters have on the system.
Depreciations
The setup of different types of depreciation could be difficult depending on regulations and demands, especially with different types of assets.
Parameters
“Normal” or “Budget” assets
The difference between “normal” and “budget” assets are that no depreciation is created for budget assets, which also means that no G/L transactions are created.
This could be useful for adding assets during projects (which have not been considered yet as a “normal” asset). When the project is closed, either enter a new asset with the total of all “budget” assets included in the project, or change the “budget” assets to “normal” assets.
G/L postings
The G/L postings are defined in Work with account codes. You can set up different accounts depending on:
- Asset type
- Asset group
- Acquisition year code (1=current, 2=prior) (only on acquisition)
- Asset quality
- Asset account group
- Depreciation type (on depreciation and disposal)
- Depreciation rule (on depreciation and disposal)
- Disposal type (only on disposal)
- Acquisition type
…and a combination of these.
Acquisition
The acquisition amount is for all depreciation types.
It is vital that the records in Work with account codes are defined correctly, to get the G/L postings for disposals correct (it will reverse the amount on the acquisition account set up in ASM, not the account where it was originally posted to in the G/L).
G/L postings on acquisition account(s) are created when there has been a change of the acquisition account/asset in ASM and when there has been a disposal. For changes, the postings are created in account movement proposal or depreciation proposal. For disposals, the postings are created directly in disposal proposal.
Depreciation type
Depreciation types could be either “internal” or “external”. Only internal types are used by acquisition type to control if the specific type will be used.
Profit/loss calculation is only performed on the “main” depreciation type (set up in the ASM control file).
For reconciliation between ASM and the G/L per depreciation type, it is necessary to enter all involved assets to that depreciation type, regardless if they should be depreciated.
Only assets with the selected depreciation type are printed on most listings, except the balance list that could print all “normal” assets if the parameter Balance assets only is NO.
Non-depreciable amount
For assets that will not be fully depreciated or not depreciated at all on that depreciation type.
The residual amount can be printed on the balance list with or without reduction of non-depreciable amount.
Alternative depreciation
The calculation of alternative depreciation amounts are only done in:
- Depreciation proposal (where it is used in the control list and also shown in maintenance. It is not possible to update).
- Alternative depreciation comparison list.
Entering existing asset
Here, the G/L postings for acquisition and depreciation already exists, and you should enter the asset in ASM.
- Check that the acquisition account is the same as the G/L account.
- Check that the depreciation account(s) is the same as the G/L account(s).
- Always use the actual acquisition date/period. On the first depreciation of the asset it will calculate total depreciation amount (from acquisition date/period to actual depreciation date/period) and subtract the accumulated depreciation amount to get the depreciation amount for the period.
- Enter the correct last depreciation date/period.
- Check that the amount entered as depreciation value in Maintain accumulated depreciation is the same as in the G/L. If the depreciation amount entered is the same as the acquisition amount, then the final depreciation date/period is updated with the last depreciation date/period and no more depreciation is calculated on this depreciation type for this asset.
- For all depreciation types accounted for in the G/L, repeat steps 1-5.
- If you have different G/L accounts for acquisitions actual year and acquisitions previous years, and you used to move them manually in the G/L consider this: It is possible to let ASM do that for you if you have defined Work with account codes with a year code.
Note: You have to start ASM with the actual year/last depreciation period in ASM corresponding to the actual year/last depreciation period in the G/L and that the check for which year code to use is done on the acquisition date/period of the asset.
Asset without depreciation
If the asset should not be depreciated, there are two alternatives:
- Set the depreciation type(s) to NO.
- Use the acquisition amount as non-depreciable amount.
The only difference between the two alternatives is the appearance in listings. There are some listings were you select depreciation type and if the asset does not use that depreciation type, then the asset is not printed.
Note: The “main” depreciation type is used in calculating profit/loss on disposal. If the asset does not use that depreciation type, no calculation of profit/loss is done.
Reconciliation with the G/L
There are two printouts for reconciliation with the G/L:
- Acquisition account reconciliation list.
- Asset balance list, this is depending on how ASM is set up.
To use the balance list as a reconciliation tool it is important that the selection parameters of the balance list are set according to the accounting rules in Work with account codes and that all relevant assets/depreciation types are entered. Otherwise, it is not possible to use this printout as a reconciliation tool.