Fixed assets

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Posted on by Michael agostini

Dear Microsoft Finance Community

I have a question around D365 fixed asset functionality and assets under construction.

Our client is installing an asset such as a machine (i.e. purchase machine and incur all the costs associated with its installation and getting it to work) and booking all the costs to a Balance sheet construction in process account.

QUESTION

Can you do this in the D365 Fixed asset module. In other words set up an asset that is "under construction" that has an GL account = "Equipment under construction" and tack all the costs associated with this machine against this fixed asset record / asset. When the asset is ready to go into production then transfer all the costs to a real depreciable asset and start depreciating. This new asset would still have a record of all the invoices that were paid to crate it.

The other option would be to set up a custom financial dimension on the construction in process account and track the purchases that way.

Thanks,

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André Arnaud de Cal... 301,035 Super User 2025 Season 2 on at

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Hi Michael,

You can setup an investment project where you can capitalize the value of the asset. At the end of the construction, you can then transfer the amount to a fixed asset.

You can read a scenario in this blog: How to manage investment projects in Dynamics 365 Finance and Operations (linkedin.com)

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saurabh bharti 15,039 Moderator on at

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Hi Michael,

You can also use simple inventory module.

1. Create product in product master with item model group preferably as FIFO.

2. Create Purchase order , Receive and Invoice

3. Add all other costs to this product in inventory using charge code even after posting invoice.

4. Now you will have quantity in inventory with all the costs added to it

5. Now when you decide to depreciate, Create new fixed asset number with required group

6. Now create inventory to fixed asset journal under fixed asset module

and transfer that inventory quantity to newly created fixed asset

7. After posting all the cost will be transferred to fixed asset and asset will be acquired status , now you can work with this usual asset transactions

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Michael agostini on at

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Hi Andre,

I am trying to stay out of the projects module.

What I am really asking is can D365 allow you to book several PO's or invoice journals (essentially costs) against one fixed asset (that has not started to deprecate). When all the costs have been booked against this asset then start depredating it.

tTe issue is we need the costs to go to a CIP account first (construction in process).

Thanks

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Michael agostini on at

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I am not sure if I understand what you are saying.

There will be a number of PO's on this type of asset and they are not inventory items.

Thanks,

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André Arnaud de Cal... 301,035 Super User 2025 Season 2 on at

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Hi Michael,

You can post multiple acquisitions to an asset, but there is no out of the box support to change the ledger account of the acquisition value before starting the depreciations. If you are using two different assets, you can create a fixed asset journal and transfer the value.

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saurabh bharti 15,039 Moderator on at

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They are not inventory but they are CWIP (Capital work in progress ) which is an asset in balance sheet until it is capitalized.

So you keep in CWIP until it is capitalized using inventory module feature. Instead mapping inventory account map CWIP account.

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Ludwig Reinhard Microsoft Employee on at

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Good morning Michael,

If you don't like to go for the project module then you can proceed exactly as you planned with the FA module.

A key thing is the parameter setting for allowing multiple acquisitions that Andre mentioned.

Once your fixed asset is complete, you can move the total accumulated costs to a new fixed asset - e.g. by making use of the split functionality - and start depreciating it.

That's not absolutely necessary but my experience is that finance/accounting people prefer to have a new and separate fixed asset once the construction is finished.

Best regards,

Ludwig

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Michael agostini on at

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That is what I wanted to know. Thank you.

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Michael agostini on at

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I am not sure what inventory has to do width any of this. I understand what a CIP account is.

Thanks

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Michael agostini on at

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Two questions Ludwig

1) I am assuming I need to set up an additional fixed asset group called CIP with the correct CIP main account in it.

2) Would it not be easier just to use a custom financial dimension on the CIP account. :)

Thanks very much,

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