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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Fixed Asset Revaluatio...
Microsoft Dynamics AX (Archived)

Fixed Asset Revaluation process

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Posted on by Muthusamy 4

Hi All,

I have a fixed asset which is acquired over some years ago and those asset are revalued with current market price.

For e.g.

Acquisition date - 01/Jan/2017, Acquisition Cost - 60,000 USD , Useful Life Year - 3, Depreciation Method - Straight line depreciation

Up to 31/Dec/2018 depreciation done. Now, total depreciation cost is 40,000 USD and current net book value is 20,000 USD.

The same asset is revalued based on the current market price as 50,000 USD with the remaining life years of 3. So, asset value 50,000 USD has to be depreciated for next 3 years (from 2019 Jan to 2021/Dec).

I have done the following process in the system,

1. Have done the write-up adjustment of 30,000 USD to bring the current asset value as 50,000 USD (20,000 USD is already in net book value). So, totally i can see 50,000 USD is my current net book value.
2. Then, I have updated the useful life years as 5 and remaining depreciation period as 36.

3. In depreciation profile, i can see the remaining depreciation amount 50,000 USD will be fully depreciated on Oct-2021 based on straight line method (System takes the total Asset cost as 90,000 USD (60,000 USD + 30,000 USD) and calculated the remaining depreciation amount 50,000 for total life years 5(3 + extended 2 years)based on the straight line method and monthly depreciation amount as 1500 from Jan2019 onwards (Initially it was 1666.67 per month based on 3 years 60000/36 , and now system calculate as 90000/60 for 5 years). So, amount fully depreciated at the end of Oct 2021). it has to carry the depreciation until Dec2021.

I want to take this revised net book value of 50,000 USD and need to carry the depreciation for next 3 years fully based on straight line depreciation method.

let me know, how we can make the FA transaction entry..

Thanks

*This post is locked for comments

  • Suggested answer
    Muthusamy Profile Picture
    Muthusamy 4 on at
    RE: Fixed Asset Revaluation process

    Hi Ludwig,

    Thanks for your suggestion and I have done the revaluation as I explained in the previous post and i can see the expected figures in FA & GL reports after making the revaluation.

    Thanks.

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Fixed Asset Revaluation process

    Hi Muthusamy V,

    If this is working for you and in line with the accounting rules in your country then you can certainly go ahead with this.

    In my home country I would simply post a write up adjustment for 30000 USD and continue depreciating the fixed asset.

    This is much simpler as it requires only a single transaction.

    Unfortunately, I cannot tell you what is required in your home country but if the transactions are ok then double check with a colleague to get some additional assurence that everything is ok and go ahead.

    Best regards,

    Ludwig

  • Suggested answer
    Muthusamy Profile Picture
    Muthusamy 4 on at
    RE: Fixed Asset Revaluation process

    Hi Ludwig,

    I have changed it to straight line life remaining as depreciation method and i can see the depreciation profile changes accordingly and it's working fine as per the requirement. Thanks!

    For to handle this in AX accounting side,

    Asset Purchased  in 2017 Jan with the cost of 60,000 USD and Depreciated 40,000 USD up to until Dec 2018. So, Current Net book value is 20,000 USD.

    Now, Asset revalued based on the current market price as 50,000 USD. So, I have planned to capture the below transaction in AX as per the image below.

    1. Depreciation Adjustment - To reverse the accumulated depreciation value of 40,000 USD (Debit - Acc. Dep. Account, Credit - FA Comprehensive Income).

    2. Acquisition Adjustment - To deduce the accumulated depreciation value of 40,000 USD in Asset Account (debit - FA Comprehensive Income, Credit - Asset Account).

    3. Write Up Adjustment -  Adjustment of 30,000 USD to bring the revalued asset value of 50,000 USD (debit - Asset Account, Credit - FA Comprehensive Income).

    FA-Revaluation-process.JPG

    I have tested the above case and it working for me in accounting side  as well as reporting side.

    Can I proceed this way? or Please suggest.

    Thanks,

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Fixed Asset Revaluation process

    Hi

    Have you tried using the straight line life remaining depreciation method?

    This should ensure that the correct depreciation is calculated.

    Regards

    Ludwig

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