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Consider the following scenario...
A server and software are purchased on a Payables invoice (for $5,000). The Purchase Distribution account uses the Fixed Asset Purchase Trigger account.
Using the FA General window, the Asset ID is entered as 2007-01, Suffix of 1.
The Purchase button is available and is used to select the Purchase invoice. The Acquisition Cost of the new fixed asset is $5,000.
The Book window is opened and the new Asset ID 2007-01, with the main Book ID are selected. With the Book Class relationship having been previously created, the Asset Book populates as follows:
Asset ID: 2007-01
Book ID: AMT
Place in Service Date: 04/01/2007
Depreciated to Date: 04/01/2007
Begin Year Cost: $5,000.00
Cost Basis: $5,000.00
Original Life Years, Days 05 000
Remaining Years, Days 05 000
Net Book Value: $5,000.00
The asset has been added to the FA Module
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Along comes the end of the month 04/30/2007 and the asset is depreciated.
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Along comes the end of the month 05/31/2007 and the asset is depreciated.
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It's the middle of June, 06/15/2007 and a Maintenance Plan is purchased for the server (FA Asset ID 2007-01). The purchase is entered as a payables invoice (for $3,000), again using the Purchase Distribution account uses the Fixed Asset Purchase Trigger account.
Using the FA General window, the Asset ID is entered as 2007-01, Suffix of 1.
The Purchase button is available and is used to select the Purchase invoice. The Acquisition Cost of the fixed asset is $8,000 (1st invoice of $5,000 + 2nd invoice $3,000).
The Book window is opened and the new Asset ID 2007-01, with the main Book ID are selected. The Asset Book populates as follows:
Asset ID: 2007-01
Book ID: AMT
Place in Service Date: 04/01/2007
Depreciated to Date: 05/31/2007
Begin Year Cost: $5,000.00
Cost Basis: $5,000.00 <======= Should this have changed?
Original Life Years, Days 05 000
Remaining Years, Days 04 305
Yearly Depr. Rate: $750.00
Current Depreciation: $84.55
YTD Depreciation: $166.37
LTD Depreciation: $166.37
Net Book Value: $4,833.63
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So here's my question? Should the Cost Basis have changed to $8,000.00? Should the asset have the Year Rest or the Life Reset, or something else done?
Is this the correct way to process the asset in this scenario?
Thank you!
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Reset Life will recalculate the depreciation on the asset life to date. Reset Year will only recalculate the depreciation for the current year. And Recalculate will only be used going forward.
i just ran into a very similar issue with a customer. they had initially set up the asset with an initial cost basis, but had not put the asset into service. over time, there were additional purchase costs added to the basis, but the amount displayed on the window did not change.
the difference here is that no depreciation had occurred yet as the asset was not placed in service. i'm not sure if this is a differentiating fact.
however, the customer hit the delete button on the asset book window, and then went back into the asset book window and the basis reflected the updated value.
Mark,
Thank you. In the scenario mentioned above, I did as you indicated and changed the Cost Basis manually from $5,000 to $8,000. I was prompted for the reset option. I chose "Recalculate" and the Asset details were adjusted as follows:
Asset ID: 2007-01
Book ID: AMT
Place in Service Date: 04/01/2007
Depreciated to Date: 05/31/2007
Begin Year Cost: $5,000.00
Cost Basis: $8,000.00 <===== Manually changed from $5,000.00 to $8,000.00
Original Life Years, Days 05 000
Remaining Years, Days 04 305
Yearly Depr. Rate: $1,200.00
Current Depreciation: $0.00
YTD Depreciation: $166.37
LTD Depreciation: $166.37
Net Book Value: $7,833.63
In the Fixed Asset Guide on page 3-15, I found the details around Rest Life, Reset Year and Recalculate. Are there some guidelines on which options to use when? I chose Recalculate so that the new depreciation rate would not be used until the depreciation on 6/30/2007.
Thanks again!
By the way - Love your book on Building Dashboard with Microsoft Dynamics GP 2013 and Excel 2013!
It is not designed to change.
First, there is an argument that the Maintenance Plan was placed in service 3 months later and shouldn't be added to the original asset.
Ignoring that for a moment, because there are scenarios where adding to an existing asset is appropriate, adding an asset via the purchasing window to an existing asset doesn't change the book cost. Right or wrong, that's the way it works. You'll need to increase the cost manually and for each book. When you do that, you'll get the box asking you to pick a reset option
Mark
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