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Capitalize costs into fixed asset and proceed to add value to the asset

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Hello everyone,

We got a requirement from out clients about exploring the possibility to capitalize costs into a fixed aseet.

After some research, I found the possibility to capitalizes projects costs via the PM module into FA, by creating an estimate from the project expenses and eliminating it in the end.

However, we will have additional costs in the future that we will need to add to the value of the FA, therefore increasing the value of the FA.

How can this be achieved? By creating sub projects each time we have additional costs that we need to capitalize in the existing FA?

Also, is there another way to capitalize costs into FA without using the PM module?

Regards,

Teodora

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Magno Pereira 2,445 Moderator on at

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Hi Teodora,

In accounting, how you would like to reflect the GL entry?

You can do a fixed asset journal with an acquisition transaction and the expense ledger account as an offset. Without using the PM module.

This transaction will increase the FA value. The next depreciation will be higher based on the remaining depreciation periods. As a consequence, the net book value will be updated too.

Kind Regards,

Magno Pereira | Finance Functional Consultant

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Gaurangkumar Jani 4,558 User Group Leader on at

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Hi TeodoraMK,

You can use Fixed Assets Journal and post multiple "Acquisition" and "Acquisition adjustment" and record the Fixed Assets.

You don't need to use the Project module for this simple requirement.

Thanks,

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saurabh bharti 15,059 Moderator on at

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As other mentioned you can use fixed asset journal with transaction type acq or acq adjustment.

Also, it depends what is going to be Credit when doing value addition.

1. If its from supplier , use Invoice journal or PO invoice by select offset transaction type as fixed asset and select the already acquired asset

2. If its cash or bank use asset journal

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Community Member on at

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Hi Saurabh,

Thank your the suggestion.

The thing is, after the FA is created (let' say via FA Acquisition journal), all additional value additions are booked via GL (salaries for example).

How would they be added to the FA value?

Regards,

Teodora

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Gaurangkumar Jani 4,558 User Group Leader on at

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Hi TeodoraMK,

For updating the acquisition cost of FA, you can use FA Journal with Transaction Type = "Acquisition Adjustment" or You can allow multiple acquisitions by enabling features from FA perameters.

Example :

Salary Account Cr XXXX

FA COST (Using FA Posting Profile for Adjustment / Acquisition) Dr. XXX

Please let us know if this is helpful.

Thanks,

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