Fixed assets Disposal sale posting profile setup in AX

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Posted on by Durgarao

Dear All,

Currently I am implementing Fixed assets module in Dynamics AX 2012 R3 version. My client has a requirement where they Sale a Fixed asset (has a $ value) to customer by preparing an Invoice, to fill this requirement we have a standard feature in AX called "Free text invoice" and If my client would use this Free text invoice feature they want system to post the below journal entries after posting of invoice.

For a better understanding, I put some example here with journal entries.

Cost of an Asset is 10000, Depreciation value is 4000, Asset sold for 5000 and the Loss on sale of Asset is 1000.

1) Accounts receivable:

Accounts receivable a/c Debit 5000

To Disposal Sale a/c Credit 5000

2) To reverse the Asset value (take out from Asset register)

Disposal Sale a/c Debit 10000

To Asset a/c Credit 10000

3) To reverse the Depreciation

Accumulated Depreciation on FA a/c Debit 4000

To Disposal Sale a/c Credit 4000

4) To capture the Gain/Loss on sale of Asset

Gain/Loss on sale of Asset a/c Debit 1000

To Disposal Sale a/c Credit 1000

I am not much familiar with this setup in Fixed asset disposal Sale posting profile and I would really appreciate and thankful to someone who can address me the Asset Disposal sale setup and the output using Free text invoice If we can achieve.

Thanks & regards,

Durgarao.

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ZvikaR 168 on at

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something very similar to your requirement can be achieved easily with the out of the box functionality.

In your example, all the amounts (asset, depreciation, sale amount) flow to "disposal sale" account which is sort of a clearing account, and from there the "net" gain/loss goes into "Gain/Loss of asset"

You can easily setup all the above amounts to go directly, and net out on the Gain/Loss on sale of asset (so without going through the clearing account of "disposal sale"

If that would work for your users than the set up is:
1. "Disposal - sale" main account: gain/loss on sale
2. Disposal/Sale section:
a. Acquisition: main account: asset offset: gain/loss on sale
b. Depreciation: main account: accum. depre. offset: gain/loss on sale
c. Net book value: main account: gain/loss on sale, offset: gain/loss on sale.

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Ludwig Reinhard Microsoft Employee on at

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Hello Durgarao,

In the MS Contoso demo companies a setup similar to the one that you are looking for is already made. Please have a look at the USMF demo company and the fixed asset posting profile that is setup there.

The only thing missing to what you are looking for is that this demo setup does not differentiate between Profit/loss from the FA sale. Yet, this is something that you can easily modify by making use of a clearing account that Zvika described.

Best regards,

Ludwig

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ZvikaR 168 on at

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just to clarify - I did not suggest using a clearing account.

the opposite - the clearing account you seem to be using "disposal sale" - I argue that if it is not necessary you can get exactly the final posting you want

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Durgarao 85 on at

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Dear Zvika Rimalt,

Thank you for your quick response.

I have tested everything as per your instructions, but end of the transaction (after posting of sale invoice) system is not showing the Gain or Loss on sale of asset value separately as it has got asset, depreciation and sale amounts. As per my client requirement, they want to see the Loss or Gain value separately for reporting purpose and moreover they do large number of transactions and if they would fallow this procedure always it would be manual calculations for them to find out the actual Loss or Gain of particular assets which user does not wants to do it.

Please advise how do i proceed.

Regards

Durgarao.

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ZvikaR 168 on at

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I am not sure I understand your requirement.

The loss/gain from sale is the result of formula:

sales price - net book value = sales price - (acquisition - depreciation) which is what my suggested configuration does, and what get posted into that account.

Hence - your GL balances are what they need to be.

If the requirement from the customer is only for reporting purposes - several FA reports will show you, post sale, what was the resulting profit/loss amount for that fixed asset.

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Durgarao 85 on at

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Hi Zvika Rimalt,

Thank you so much for your response.

I might have expressed myself in a wrong way. Let me tell you like this, today we had a discussion with our User about this requirement completely and came to know that they want system to capture this Gain/loss amount separately after posting free text invoice means the actual Gain/Loss amount value for that particular account and User should be able to see the same amount in GL balance.

For example, if the value of an Asset is 5000, Depreciation is 2000 and sold it for 2500

finally loss on sale of asset is 500, this 500 loss on sale of amount they want to see with separate ledger account itself. I know that again i am explaining about this requirement but the reason is to get a better solution only.

Please advise me on this with account setup.

Regards,

Durgarao.

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ZvikaR 168 on at

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I don't think you can get the system to work in exactly the way you describe.

If I were in your place I would have demonstrated the out of the box functionality, and the related reporting (that clearly documents and reports in the sub-ledger of the total gain/loss) and see if they can live with that.

Customizing for something like that sounds to me foolish, to say the least, but hey, more job security for everyone.

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Khaled Alloud 3,658 on at

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Hello,

After exploring the out-of-the box functionality in AX you can either perform a manual journal entry to switch to the ledger accounts you need, or make an automatic ledger allocation.

Thank you,

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Ludwig Reinhard Microsoft Employee on at

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Hi,

You can get a posting that automatically separates your profit and loss from the sale of the fixed assets.

I once created a documentation for me where I recorded that.

Here is how the sales setup looks like

I know that all terms are in German but the critical thing to realize this is that you use separate accounts (980697, 980698 and 980696) for the transaction types all, profit and loss to get the profit or less identified and posted on a separate account.

Unfortunately, I do not have this picture in English language but you can possibly change your language setup and use an online translator to see what the terms mean.

There are a lot of lines that need to be setup but the advantage of doing that is that you can directly identify what profit or loss you made based on the recordings on your ledger accounts.

Best regards,

Ludwig

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Durgarao 85 on at

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Dear All,

Thanks for your valuable suggestions.

To Ludwig - Currently we have more than 100 Asset Groups and as you said it would be critical ledger mapping for all the group of assets. However, I am working on the same to see the result and I will let you know the status.

To Kaled Alloud - If i want to apply automatic ledger allocation, on what basis should i put the allocation ? because the automatic ledger allocation feature will allow us to enter percentage from account and If i understood correctly we are not sure how much percentage it would be, so please guide me how do i proceed in this case and what would be the From and To account for automatic allocation.

Expecting your optimistic reply.

Regards,

Durgarao.

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