Introduction

Fixed Assets are property used in the operation of a business, but not usually consumed or converted into cash. They are normally represented on a balance sheet at their net depreciated value. Almost all organizations have fixed assets that are either own and/or lease. Fixed Assets include anything a company has purchased for its own use for which depreciation is recorded such as:

• Vehicles
• Computers
• Furniture and fixtures
• Plant machinery and equipment
• Leasehold improvements
• Land
• Buildings
• Office equipment

The following are categories of needs or requirements an organization may have regarding its fixed assets. Most organizations have management needs in each of the following categories.

Property Management

The Property Management categories of usual needs or requirements are:

• Physical inventories - What do I have? Where is it? What condition is it in?
• Asset movement (transfers from one building, room, or general ledger account)
• Repair and maintenance
• Leased assets
• Hazard insurance (in case of fire, flood, etc.)

Corporate Reporting

The Corporate Reporting categories include:

• Accounting rules (capitalize, depreciate, dispose)
• How fixed assets affects the General Ledger - financial statement reporting requirements (Fixed Asset activity for the year and so on)
• Department/Division accounting
• Integration with other accounting functions, which affect or are affected by fixed assets transactions, such as Purchasing (buying an asset), Sales (selling an asset), General Ledger (everything, including depreciation and transfers)
• Budgeting - Depreciation projections

Tax Reporting

The Tax Reporting categories:

• May be different rules than corporate reporting (typically in depreciation lives and methods)
• May require the same asset to have depreciation calculated under two different methods and then compare the results (U.S. Federal Tax vs. Alternative Minimum Tax or AMT)
• May be different rules for the different taxing entities (tax rules for a state different than Federal)
• May include automobiles, gains and losses on disposal, investment credits
• Typically include tax rules in effect the year an asset was required

Regulatory Reporting

The Regulatory Reporting category includes the following requirements and needs to determine fixed assets:

• Other than income tax
• Property tax

Features and Benefits

Microsoft Dynamics™ GP Fixed Assets helps you create and maintain asset records. This module provides complete tracking of fixed assets from the acquisition date through retirement. The following information provides a sampling of the features and benefits available in this module.

Set up Asset Records

The Fixed Assets module contains the following features to assist in setting up asset records:

• Create Book Class Records - A Book Class groups assets according to items such as:

– Book for depreciation reporting (corporate, federal, alternative minimum tax, etc.)
– Type of property
– Depreciation method
– Averaging convention
– Depreciable life

Fixed Assets allows you to set up an unlimited number of books:

• Tailor User-Defined Fields - This feature allows you to define 15
user-defined fields in the Fixed Assets Company Setup window. For
example, to track assets by project number, define the name and
format of the field, and then print a report of assets by project
number.

Asset Tracking and Depreciation

The Fixed Assets module contains the following features to assist in setting up and processing fixed asset records:

• Validate Fields - Setup windows ensure the accuracy of data:

– The set up for Book Class ensures that only valid classes are used for each book.
– The set up for Locations ensures that only valid locations are entered.
– Other setups are for Account Groups, Insurance Classes, Lease Company, Quarter Definition, Retirement Codes, Physical Location ID, and Structure ID.

• Calculate Depreciation - Fixed Assets can calculate depreciation for all assets in a company, all assets in a particular book, a predefined group of assets or one asset.
• Depreciation Projections - Depreciation Projections are helpful for budgeting purposes. They project future depreciation without updating the Fixed Asset files. Depreciation Projections may be run for the entire life of the asset.

Changes, Retirements and Transfers

• Record Changes to an Asset - Asset changes are recorded on the same window as new asset additions. When any fields affecting depreciation change, the following three choices are available:

– Reset depreciation for the current year.
– Reset depreciation back to the beginning of the life of the asset.
– Depreciate from the current point of depreciation forward using the new characteristics assigned to the asset.

Fixed Assets can also perform mass changes to asset records.

• Record Retirement Information - Information about the sale of an asset is recorded in the retirement window. Fixed Assets uses the proceeds entered and the net book value to determine the gain or loss on the sale of an asset. Fixed Assets can also perform mass retirements.
• Record the Transfer of an Asset - When an asset is transferred from one account, location, or structure ID to another, the transfer information is recorded in the transfer window. Depreciation is automatically allocated up through the transfer date on the transferring asset, and begins depreciating on the receiving asset on the day after the transfer date. Fixed Assets can also perform mass transfers.

Reports and Inquiries

• Print Reports - The Fixed Assets reporting feature prints standard reports delivered with the Fixed Assets module and any customcreated reports. You can also copy existing reports and modify them to meet your company's needs.
• Inquiries and Zooms - Fixed Assets allows you to zoom to the origin of a transaction, even if it originated in the Purchasing Series. This feature helps trace an error in a transaction back to its origin. You can also use inquiry windows to view asset information.

Fixed Assets Processes and Integration

The following list categorizes tasks and processes in the Fixed Assets module.
Each is performed in this sequence.

NOTE: Setups must be completed before any of the other processes.

• Add/Change Assets

– Adds when converting assets from prior system
– Periodic (monthly) - Add new acquisitions; changes existing assets

• Record Asset Transactions - Periodic (monthly) - Retirements, Transfers, Mass Maintenance
• Depreciate

– Periodic (monthly) - Corporate (GL) book
– Other books - Less often

• Posting to General Ledger - Periodic (monthly)
• Inquiry/Reporting

– Inquiry - Ongoing
– Reporting - As requested. Some reports periodic (monthly); others less often

• Physical Inventory - Typically on yearly basis
• Year End

– Done at the end of each fiscal year
– File Maintenance
– Some periodic (monthly); most on an as needed basis

Integration

Integration links two or more application modules to form a comprehensive
business management system. When installing Microsoft Dynamics GP modules,
they are automatically integrated.

Information is shared between modules, making data entry:

• Faster
• Easier
• More accurate

You can print detailed reports because information entered in one module can be combined and analyzed with information from other modules. Information from Purchase Order Processing and Payables Management update the Fixed Assets module. Fixed Assets information updates the General Ledger module.

Purchasing Interface Options

There are three ways to integrate transaction flow from the Purchasing series to Fixed Assets:

• Using Payables Management
• Using Purchase Order Processing by Account
• Using Purchase Order Processing by Receipt Line

Fixed Asset acquisitions entered in Payables Management integrate with a Fixed Assets holding table where they can be selected and added as a fixed asset. This integration is accomplished with a “trigger account” defined in the Fixed Assets Purchasing Posting Accounts Setup window. When entering a payables invoice, change the PURCH type distribution line to an account defined as a “trigger account” in Fixed Assets.

Fixed Asset acquisitions in Purchase Order Processing interface with a Fixed Assets holding table where they can be selected and added as a fixed asset. The first option is to interface by account. When selecting this option, change the PURCH type distribution line to an account defined as a trigger account. When integrating with Purchase Order Processing by Receipt Line, you can indicate if an asset is a fixed asset by expanding the item number and selecting the Capital Item check box. It is not necessary to change distributions or set up a purchasing posting account in Fixed Assets.

In this case, the “trigger” is selecting the Capital Item check box. The benefit of integrating by Purchase Order receipt line is that some items on a purchase order can be designated as a fixed asset, while other items may not. For example, when purchasing 10 computers and 10 surge protectors, you could capitalize only the 10 computers and not the surge protectors.