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

Fixed Asset

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Posted on by lally 8

Hi All ,

In AX , we maintain the one vendor main account /customer main account to hold the balances at general ledger level .

Assume that there is  a account as mentioned below .

21000-   Foreign Vendor   -  $10000

Assume that we do the payment against these foreign vendors , then will reduce . Ex  :  $8000.

that means , when book new invoices / credit notes/payments for the foreign vendors same account will be effected.

But when it comes Fixed Asset , we have FA acquisition account , accumulated deprecation account, .

When we post the acquisition , FA acquisition account will be effected ,but when we post the deprecation for the same asset , deprecation should not posted to Acquisition account , but to be posted to Accumulated deprecation account .

Can I know the what is the business reason / accounting rules of behind of this behavior ?

*This post is locked for comments

I have the same question (0)
  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi lally,

    Do I understand you right that you want to know the reason why you do not post the depreciation against the orginal 'fixed asset acquisition' account?

    I just assume that this is the case and the answer to your question is that it depends.

    That is you can either post the depreciation directly against the fixed asset acq. account (net method) or use a separate accum. depreciation account (gross method).

    The gross method is better because many accounting bodies require explicitly the reporting according to the gross method, which gives better insights in the fixed asset structure.

    Best regards,

    Ludwig

  • lally Profile Picture
    lally 8 on at

    [quote user="Ludwig Reinhard"]

    use a separate accum. depreciation account (gross method).

    The gross method is better because many accounting bodies require explicitly the reporting according to the gross method, which gives better insights in the fixed asset structure.

    [/quote]

    Thanks for the reply ,

    In this case , accum.depreciation account and acquisition account will never become zero, always contain the balance.

    If we go with the depreciation process only( not sale / scrap ) , then these accounts never become zero.

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

    Hi lally,

    You are right.

    The individual accounts will never become zero but in sum they will.

    As an example, the fixed asset acquisition account and the accumulated depreciation accounts will both be included in the balance sheet and once the fixed asset is fully depreciated, the sum of both accounts will be zero.

    Best regards,

    Ludwig

  • lally Profile Picture
    lally 8 on at

    Thanks for the reply ,

    In this case , for example  , Assets - vehicle ,if user wants to know the vehicle Assets value from the main account balances ,then what is the formula and what are all the accounts to be consider to get the as on date value ?

    One more question , why we need to follow the two depreciation process , Company and Tax ?Please exaplain with an example .

    Thanks in advance.

  • Suggested answer
    guk1964 Profile Picture
    guk1964 10,888 on at

    You don't have to follow two depreciation processes i.e. Company and Tax

    However, in global company for comparison of performance across companies you may want to have the same depreciation policies for all companies in the group.

    In each country there may be a different statutory /GAAP regime which prescribes specific depreciation policies for the given country. Different depreciation policies affect the timing of cost recognition, ant thus impact declared profit and thus the timing/amount of tax payable.

    So you may need to provide  a different set of financial reports to Head office as you do to the taxman.

    This is accounting  not Ax.

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

    Hi lally,

    The net book value of your fixed assets (for example vehicles) can be obtained by adding all balance sheet accounts that belong to this fixed asset group.

    Yet, to be honest, I don't know many people doing that because you can get those values much faster and easier from the fixed asset statement reports.

    Regarding the company and tax question, this depends on what you want to achieve. If you want to calculate fixed asset values according to local GAAP then you will make use of a single value model. If your tax authorities have different fixed asset accounting rules you can apply a second value model that calculates the fixed asset tax values. As an example, take a company car that can be depreciated over 5 years according to local GAAP but where your government requires to depreciate it over 8 years. In this case you will have 2 value models setup that allow you identifying the GAAP and the tax value.

    Does this answer your questions?

    Best regards

    Ludwig

  • Sandesh boloor Profile Picture
    Sandesh boloor 88 on at

    Hi Ludwig Reinhard,


    Thanks for your detailed explanation. Which cleared few of my doubts.

    Anyhow, I want to know "How to configure the disposal of fixed assets for Net method and Gross Method?". As one of my clients is looking to account different asset group based on the method. Please let me know how to configure the FA posting profile and what are all the posting types to be considered. 

    Appreciate your response.

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi Sandesh boloor,

    Can you quickly clarify the relationship to the question from lally?

    I do not see a direct relationship and would like to ask you to oen a new thread.

    Many thanks and best regards,

    Ludwig

  • Sandesh boloor Profile Picture
    Sandesh boloor 88 on at

    Hi Ludwig Reinhard,

    Its just an extension to Lally's question.

    Anyways I creating a new thread to ask on the Net method and Gross method configuration.

    community.dynamics.com/.../273240

    Regards,

    Sandesh

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