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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Capitalization thresho...
Microsoft Dynamics AX (Archived)

Capitalization threshold concept in Ax 2012

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Posted on by Community Member

Hi

How does capitalization threshold concept work in Ax. Below is the scenario:

Capitalization threshold (in FA parameter): $5000

Acquired a FA for $3000. Depreciation profile: SL remaining

1. How does Ax behave after this transaction:

2. My understanding is that system should propose 100% depreciation within the same fiscal year. This is not happening and Ax is calculating depreciation as a normal asset.

3. How Does Ax work as per design.

Regards

Setty

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I have the same question (0)
  • Pranav Kumar Profile Picture
    Pranav Kumar Microsoft Employee on at

    Hi Setty,

    when the FA acquisition was posted, did you checked whether the depreciation flag was unchecked or not? Normally, system will uncheck the depreciation flag so depreciation will not be posted. If you want to remove asset from balance sheet, you can post entry for that.

    Pranav

  • Community Member Profile Picture
    Community Member on at

    Pranav

    Depreciation flag is not unchecked on posting acquisition entry. you are suggesting a manual intervention to expense an asset from Balance sheet to P&L? This is a workaround.

    LCS provides a workaround:

    fix.lcs.dynamics.com/.../Solution;qc=640bbb44e8f1a6613973382c689b7ae5213ccea2e193b286ab6fca99097accfe

    Again this is just a workaround solution and not system driven.

  • Pranav Kumar Profile Picture
    Pranav Kumar Microsoft Employee on at

    Did you posted the acquisition through PO?

    LCS workaround or manual entry are workaround, i think these are the options currently available out of box.

    Pranav

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

    Hi Hsetty,

    The capitalization threshold you refer to works only with PO related fixed asset acquisitions. If you acquire a fixed asset that has a value below the threshold, the fixed asset is created and the postings recorded but the depreciation checkbox is automatically disabled so that you cannot depreciate something.

    I am not a fan of the capitalization threshold feature you mention but rather prefer the new global fixed asset identifier functionality. This also works with purchase requisitions/purchase orders but rather expenses amounts directly if the assets are below the capitalization threshold. You can have a look at this feature e.g. here: technet.microsoft.com/.../hh242106.aspx

    Hope this helps,

    Ludwig

  • Community Member Profile Picture
    Community Member on at

    Ludwig

    Thanks for the article. The fixed asset identifier and Business rules for fixed assets determination works for depreciation checkbox. Based on threshold defined in this form system will check or uncheck the depreciation field (PO route).

    This part is taken care of but what about amount going to expense account in P&L instead of an asset account in BS. To handle this, should we have a FA group or value model for which FA posting profile account will be an expense account instead of FA account?

    Regards

    Setty

  • Community Member Profile Picture
    Community Member on at

    Pranav, you are correct. Thanks.

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

    Hi Setty,

    As far as I remember the expense is posted on the procurement category specified in the Business rules for fixed asset determination form if the amount is below the threshold. The ledger account must be specified in the inventory module under Setup - posting - posting in the purchase expenditure for expense section. If you have a demo system available probably try to get this setup and test the feature. If you can't manage getting this running reply to this thread and I will try to get set this up on my demo machine and post some screenprints.

    Thanks,

    Ludwig

  • Community Member Profile Picture
    Community Member on at

    Hi Ludwig

    I had already setup ledger posting for procurement category under purchase expenditure for expense. When a purchase invoice is posted, it is showing posting type as 'purchase expenditure for expense' but the ledger posted is still Asset account from FA posting profile  and not the account mapped in 'purchase expenditure for expense'

    Thanks

    Setty

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

    Hi Hsetty,

    I checked the feature once again and it works as follows:

    1) Setup the organization wide fixed asset identifiers and the business rules for fixed asset determination

    2) Setup a purchase requisition.

    3) In the purchase requisition you have to refer (select) the procurement category that you setup under no 1)

    4) If the amount you enter in your purchase requisition is above the threshold defined under no 1) then you can identify the fixed asset group that is related to the procurement category in the fixed asset tab of the procurment category details window. If it is below you cannot identify a fixed asset group reference there.

    5a) If you convert the purchase requisition into a purchase order and the threshold amount is surpassed then AX automatically selects the fixed asset group in the purchase order line tab and creates a new fixed asset as you post the packing slip and vendor invoice.

    5b) If the threshold has not been passed then a purchase order with the category specified is setup and the total amount gets expensed as you post the PO invoice. The fixed asset module is not touched in this case.

    Hope this helps.

    Best regards,

    Ludwig

  • Community Member Profile Picture
    Community Member on at

    Ludwig

    I am not using requisition. I am directly using PO for acquisition. I am not posting product receipt as well and doing purchase invoice directly from PO. Everything what you have said is configured but no positive results. Is there anyway i can get in touch with you?

    Thanks

    Setty

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