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Hi! I'm working on the fixed assets for the month and I'm pretty new so I'm not sure how to handle this case. We have a store that is going through a remodel and we paid a 50% deposit for them to begin the demo last month. The remodel is complete but we have been invoiced or paid for the remaining 50%. Can I capitalize the asset being that the service is complete but we've only paid for half thus far? Or should I wait until 100% of the service is paid for and simply catch the depreciation if needed? Thanks!
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Hi TXStaffAcct,
I believe that the right person who might be able answering this question is your auditor and/or tax advisor because whether you are allowed capitalizing the asset and for what $-amount highly depends on the accounting regulations that your company follows. I would thus recommend that you talk to one of those advisors or your finance manager in order to avoid problems later on.
Best regards,
Ludwig
To be sure then good to ask colleagues/auditors/manager for accounting principles. But as FA is finished I suppose it's in use.
From AX point of view: As long as the acquisition value is on the Fixed asset (regardless of paid or not) and you've activated depreciation then a proposal in a FA journal can be made and posted towards the FA.
I see the payment terms as a separate subject from entering a payment liability for receipt of the service/goods.
You conceivably could pay in 10 years time.
If you are using the asset in the business, then that investment should be capitalised and the cost recognized via depreciation otherwise your financial statements will be skewed. Tax treatment has to be considered by local requirements.You may want to accrue for an invoice not received.
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