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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / How to do Revaluation ...
Finance | Project Operations, Human Resources, ...
Answered

How to do Revaluation of Fixed Asset

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Posted on by vinay prudvi 173

Hi,

This is Vinay ,

Please help how to do fixed assets revaluation in ax 2012R3 , For example i bought Land & Building on 01.01.2016 Rs.10,00,000(10 Lakhs) but the value of land & buildings was increased by Rs.30,00,000(30 Lakhs,) on 31.12.2018.

what is the process, we can make through Fixed Asset Journal or any other process is there. And please provide  what entries are effected in books of accounts.

Thanks in Advance.

I have the same question (0)
  • Verified answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 301,035 Super User 2025 Season 2 on at

    Hi Vinay,

    You can indeed use the asset journal to make adjustments on acquisition value or revaluations. For each asset posting type, you can setup different ledger accounts which will be affected.

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi Vinay,

    Do your accounting standards allow you increasing the value of a fixed asset above its original acquisition value?

    If this is the case then you can record a fixed asset adjustment.

    Otherwise, I would recommend following up and clarifying with your accounting manager first.

    Best regards,

    Ludwig

  • vinay prudvi Profile Picture
    vinay prudvi 173 on at

    Hi Mr.Ludwig,

    In the above case the value of Land & Building is increased , in this case what posting type i have select processing through fixed asset journal.( I want to select Acquisition posting type or Revaluation posting type).

    Regards

    Vinay

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi Vinay,

    Personally, I would use the revaluation posting type as it seems to better reflect the nature of your transaction.

    Yet, as mentioned before, get a previous approval from your accounting management because increasing the fixed asset value will result in a higher profit and consequently higher tax payment. If you are not legally required making this posting, I would not do it to save some money ;-)

    Best regards,

    Ludwig

  • vinay prudvi Profile Picture
    vinay prudvi 173 on at

    Hi Dear Mr.Ludwing,

    Thank you for your answer,

    Assume an example Some X company installed Machinery on 01.01.2015 Rs.50 Lakhs, the Machinery life is 10 years, unfortunately  accident happens on 01.06.2016 ,so the company sold the part of the machinery Rs.3 Lakhs , and purchased new part Rs.15 Lakhs.

    what are the entries are effected in the books of accounts (how to revalued Fixed Asset)

    Regards

    Vinay

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi Vinay,

    I cannot answer your question completely because I don't know the accounting rules in your country.

    In my home country (Germany) the purchase or the new part for 15 might be considered as a major repair because of the quite large damage and costs (15/50 = 30%)

    If the engine of this machine is broken and replaced then I would post an acquisition adjustment for the 15; not a revaluation.

    The 3 that you got for selling the old and broken engine might be recorded as extraordinary income.

    What is still missing would be an extraordinary depreciation that one has to make because if the engine breaks down, the total value of the machine decreases from its net book value of 43.33 on 31 May 2015 to something lower than that. I cannot tell you how much that depreciation would be as it requires an assessment of the new net book value of the complete machine.

    Note: The whole 'story' might be different if the new part (engine) costs only 9. In this case the repair would not be considered as a major repair (9/50 = 18%) and the costs can directly be expensed.

    Please double check with your accounting colleagues how you should handle this in your country/region, as you might have different accounting rules compared to what we have in my home country.

    Best regards,

    Ludwig

  • vinay prudvi Profile Picture
    vinay prudvi 173 on at

    Thank you very much for your answer.

    Regards

    Vinay Prudvi

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