Fixed Asset Posting profile

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Posted on by lally

Hi All

In the FA posting profile we have the options like Acquistion adjustment , Revaluation , Writeup and write down .. what is the difference between all these ?

Could any pioneer explain with an example ?

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André Arnaud de Cal... 299,260 Super User 2025 Season 2 on at

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RE: Fixed Asset Posting profile

Hi Lally,

These are posting types used for tracing why a correction was made mainly. If you had an acquisition done and the amount was incorrect you can use the acquisition adjustment. Sometimes you need to revaluate the asset because of e.g. external factors. Then you can use the revaluation, etc.

In total the value of the asset will be changed, but now you are able to "explain" the different adjustments.

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lally 8 on at

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RE: Fixed Asset Posting profile

Thanks Andre,

Revaluation and write up / write down does the same thing as per my understanding and your example also agree with this.

Then why it has separate options Revaluation and Write up/write down? That is what I am not clear?

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Community Member on at

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RE: Fixed Asset Posting profile

Hi,

Revaluation is revaluing an asset, as per statutory regulation or if the organization feels that the book value stated is less or greater than its present value. Write up is increasing the value of fixed asset due to revaluation and Write down is decreating the value of fixed asset due to revluation the offset account will be revaulation reserve.

Acquisition adjustment is adjustment of value of fixed assets since the organization must have enhanced a fixed asset like adding a room in a building or a part of fixed asset should have been scrapped etc. The offset account is usually a bank account which indicates cash outflow due to enhancement or loss in fixed assets if a part of asset is scrapped.

Regards

Prasad

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lally 8 on at

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RE: Fixed Asset Posting profile

Thanks Prasad ,

Revaluation and write up/write down does the same work means either increase/decrease the asset value and acquisition adjustment also .

Forexample if i want to increase the asset value which option should use Revaluation or Write up or acquisition adjustment ?

The same way if i want to decrease the asset value which option either Revaluation or Write down ?

So my question is why we have these many options ?

Thanks in advance

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RamK 2,580 on at

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RE: Fixed Asset Posting profile

These are meant for reporting purposes. Detail explanation is provided in Technet. Refer technet.microsoft.com/.../aa550727.aspx and technet.microsoft.com/.../hh209549.aspx

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lally 8 on at

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RE: Fixed Asset Posting profile

Revaluation and write up/write down does the same work means either increase/decrease the asset value and acquisition adjustment also .

Forexample if i want to increase the asset value which option should use Revaluation or Write up or acquisition adjustment ?

The same way if i want to decrease the asset value which option either Revaluation or Write down ?

So my question is why we have these many options ?

Thanks in advance

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Community Member on at

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RE: Fixed Asset Posting profile

Hi lally,

Revaluation & Write-up/down are Asset transaction types - which are used for reporting purposes. I think we can explain the differences btw Revaluation & Write-up/down from IFRS perpective.

* Revaluation:

After initial recognition of a fixed asset (property, plant & equipmt type), the asset can be measured by 1 of these models:

1. Cost model - Where Net book value (NBV) = Cost LESS accumulated depreciation (depr) LESS accumulated impairmt loss

==> This is the model we usually apply to most of assets.

2. Revaluation model - Where NBV = Fair value LESS accumulated depreciation (depr) LESS accumulated

Some companies apply Revaluation model to their assets belonging to eg Building, or Land asset group. ==> Every period end, they need to revalue these assets to reflect the fair values of those.

If the revalued amount > NBV: The surplus will be posted to Revaluation reserve account.

* Write-ups/downs are used in Impairmt transactions.

An asset may be impaired if there is any indications, such as: physical damage of asset (due to fire...), or the business operation (where the asset belongs to) closes/restructures... 2 exceptions here are goodwill & intangible assets with indefinite useful lives - which must be under impairment test annually even if there's no such indications.

Write-down amt = Impairmt loss = NBV LESS Recoverable amount

Recoverable amt = the higher of Net selling price (Fair value LESS costs to sell)

& Value in use (Present value of future cash generated from using the asset)

Write-up amt = Reversal of impairmt loss

Hope this clarifies your question.

S.

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