Hi all,
Am posting this piece of information to clear the confusion regarding financial updates upon disposal of fixed assets in Microsoft Dynamics AX 2012 R3. This appears too clumsy on an apparent look on this journal entry, but trust its worth it. Hope this discussion would demystify the confusion on this topic.
The example which I have taken is
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S.NO.
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DESCRIPTION
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AMOUNT
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FORMULA
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1
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ASSET ACQUISITION
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100000
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|
|
|
|
|
|
|
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FA ACQUISITION
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DR
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|
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ACCOUNTS PAYABLE
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CR
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|
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|
|
|
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2
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CURRENT YEAR DEPRECIATION
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2000
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|
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3
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SUBSEQUENT YEARS DEPRECIATION
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10000
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|
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4
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TOTAL DEPRECIATION
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12000
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2+3
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|
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DEPRECIATION
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DR
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|
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ACCUMULATED DEPRECIATION
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CR
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|
|
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|
|
|
|
5
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NET BOOK VALUE
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88000
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1-4
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|
6
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SALE VALUE OF ASSET
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500000
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|
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7
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PROFIT/LOSS ON SALE OF ASSET
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412000
|
6-5
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OUR ULTIMATE AIM IS TO CLOSE THE BALANCES IN ACCOUNTS : FA ACQUISITION AND ACCUMULATED DEPRECIATION. THESE ACCOUNTS ARE CLOSED BY SENDING THEIR BALANCES TO CLEARING ACCOUNT (CALLED NET BOOK VALUE ACCOUNT). THIS NET VALUE IN "NET BOOK VALUE ACCOUNT" CONTAINS "ACQUISITION-DEPRECIATION". NOW THE BALANCE IN "NET BOOK VALUE" ACCOUNT IS TRANSFERRED TO "PROFIT/LOSS ON SALE OF ASSET" ACCOUNT.THE BALANCE IN SALE VALUE OF FIXED ASSET IS SENT TO THE "PROFIT/LOSS ON SALE OF ASSET". NOW THE NET VALUE IN "PROFIT/LOSS ON SALE OF ASSET" ACCOUNT CONTAINS "NET BOOK VALUE MINUS SALE OF FIXED ASSET"->>WHICH ITSELF IS THE PROFIT OR LOSS.
NOW LETS UNDERSTAND AX BEHAVIOR IN THE CASE OF SALE….WHICH IS EXACTLY THE SAME AS IN ABOVE EXPLANATION.
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STEP NUMBER
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DESCRIPTION
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1
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AX TRANSFERS THE BALANCE IN "ACQUISITION" TO "NET BOOK VALUE" - >> USED FOR DETERMINING THE NET BOOK VALUE OF THE ASSET
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2
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AX TRANSFERS THE BALANCE IN "ACCUMULATED DEPRECIATION" TO "NET BOOK VALUE" - >> USED FOR DETERMINING THE NET BOOK VALUE OF THE ASSET
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3
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NOW AX TRANSFERS THE VALUE IN "NET BOOK VALUE" (WHICH IS ACQUISITION" MINUS "TOTAL DEPRECIATION") TO "PROFIT/LOSS ON SALE OF ASSET"
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4
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AX TRANSFERS THE BALANCE IN "SALE OF FIXED ASSET" TO "PROFIT/LOSS ON SALE OF ASSET" - >> USED FOR DETERMINING THE PROFIT/LOSS ON SALE OF ASSET
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BY DOING THIS, THE ACQUISITION AND ACCUMULATED DEPRECIATION ACCOUNTS WILL ALSO BE CLOSED. BELOW IS THE JOURNAL ENTRY FOR DISPOSAL.
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STEP NUMBERS MENTIONED ABOVE ARE CORRELATED HERE
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NOMENCLATURE AS PER FIXED ASSET POSTING PROFILE
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DR/CR
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ACCOUNT NAMES AS PER COMMON PARLANCE
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DR/CR
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AMOUNT
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|
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ACCOUNTS RECEIVABLE
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DR
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ACCOUNTS RECEIVABLE
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DR
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500000
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4
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SALES VALUE (DISPOSAL PARAMETERS)
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DR
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SALE OF FIXED ASSET
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DR
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500000
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1
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ACQUSITION OFFSET (DISPOSAL PARAMETERS)
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DR
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NET BOOK VALUE
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DR
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100000
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2
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DEPRECIATION (CY) (DISPOSAL PARAMETERS)
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DR
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ACCUMULATED DEPRECIATION
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DR
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10000
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2
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DEPRECIATION (PY) (DISPOSAL PARAMETERS)
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DR
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ACCUMULATED DEPRECIATION
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DR
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2000
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3
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NET BOOK VALUE OFFSET (DISPOSAL)
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DR
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PROFIT/LOSS ON SALE OF ASSET
|
DR
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88000
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3
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NET BOOK VALUE (DISPOSAL)
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CR
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NET BOOK VALUE
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CR
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88000
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2
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DEPRECIATION (PY) OFFSET (DISPOSAL PARAMETERS)
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CR
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NET BOOK VALUE
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CR
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2000
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2
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DEPRECIATION (CY) OFFSET (DISPOSAL PARAMETERS)
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CR
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NET BOOK VALUE
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CR
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10000
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1
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ACQUSITION (DISPOSAL PARAMETERS)
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CR
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FA ACQUISITION
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CR
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100000
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4
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SALES VALUE OFFSET (DISPOSAL PARAMETERS)
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CR
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PROFIT/LOSS ON SALE OF ASSET
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CR
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500000
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SALE OF FIXED ASSET
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CR
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SALE OF FIXED ASSET
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CR
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500000
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Reply back on this post in case of any queries.
Pranav Teja Kasinadhuni
AX Functional Consultant
B2B Software Technologies Ltd
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