[Concept and How to] Split Fixed Asset in MSD365 FO

Dear Dynamics 365 Lovers,

I hope this article will help you regarding the Fixed Asset split concept and how this can be used in Microsoft Dynamics 365 FO.

Let’s explore

What is Fixed Asset Split and why this is required in Finance?

Sometime for companies it is a very common practice to clean up fixed assets or send some percentage of the existing fixed asset value to another fixed asset.

Business specific scenario

‘Office Assets 2016’ was acquired with 5000 on 2016 or it was acquired with some purpose and company decided to split/ divide 50% of the amount to another fixed asset, hence it means 2500 acquisition value will be taken out from Office Assets 2016 and will be transferred to fixed asset ‘Office Assets 2021’ value

Accounting Entry while splitting fixed asset

Office Assets 2016- Acquisition adjustment will be posted with negative 2500 (now acquisition amount will be 2500 from 5000)

Office Assets 2021- Acquisition entry will be posted with positive 2500 (the acquisition amount will be 2500.

Let’s explore this in Microsoft Dynamics 365 FO

Pre-requisite

1. Existing Fixed Asset book Status must be in ‘Open’ status, destination fixed asset status book should not be ‘Closed’
2. Fixed Asset Posting profile must be setup as per the general setup for Acquisition of destination asset and Acquisition Adjustment for the existing asset.
3. A general Fixed Asset journal is required (Assuming this is already there because previous fixed asset was acquired with some journal).
4. Allow multiple transactions within one voucher must be enabled in General ledger parameter, see below.

How to use Fixed Asset Split Function in MSD365 FO

Navigate to Fixed Asset module- Fixed Assets- Select the existing fixed asset and go to books

Make sure the book status is open, see below screen shot, current acquired value is 5000 for Office Assets 2016 and to be split 50%= 2500

The expected results are as follows

Office Assets 2016= Existing Asset, it will be split 50% to Office assets 2021. 

Office Assets 2021 value is Zero and the status is 'Not yet acquired', and it will be 2500 after the split 

Now let's split fixed asset as required

Go to Fixed Asset module- Fixed Assets- select fixed asset and book to split- from functions use "Split Fixed Asset" 

Split asset form will appear and this is the main part of this function, here we select all the details such as from and to fixed asset and fixed asset books, along with transaction date and percent of split.

In our example it is 50%.hence added as 50 in the percent column, details are articulated in the below screen shot.

Click ok and system will automatically create one journal we used in the split form

Now go to "Fixed Asset Journal" form and the journal should be available there as system created automatically, see below example of auto creation of journal.

Review the journal

• Old Fixed Asset "Office Assets 2016" will have 'Acquisition adjustment' as credit 2500 in this case
• Destination Fixed Asset " Office Assets 2021" will have 'Acquisition' of 2500 as debit in this case.

Note- above entries are created by system as per the setup of account in fixed asset posting profile fixed asset.

Post the journal.

After the journal posted, the value of old fixed asset will be 2500 in this case as 50% was split from the Fixed Asset

After the journal posted, the value of new fixed asset will be 2500 in this case as 50% was split from the old Fixed Asset

Also we can review the transactions from Fixed Asset Transactions form

In transactions, 'Acquisition adjustment' will be seen as posted with journal entry for old fixed asset (Office asset 2016)

In transactions, 'Acquisition' will be seen as posted with journal entry for new fixed asset (Office asset 2021)

This is it for this blog, I hop this nice function is now known to you after this blog.

Stay tuned for next blog