Hi to everyone,
How can one revalue a fixed asset that has depreciated to zero such that the fixed asset report shows the new revalued amount instead of including the original acquisition cost ?
Thanks in advance
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Hi, it is a normal practice to increase the value of the fixed asset (simple example of renovation done to the building). There has to be a good reason to adding additional value to FA, as just increasing it will not go down well with auditors.
If there is a good reason, you can post 'Appreciation' (rather than acquisition cost) of fixed asset - it is meant just for that.
Robertas
One of my fellow tech had suggested that, the client can post a new revalued amount as an acquisition for the fixed asset on a specific date, then resets the depreciation start date , depreciation end date and the Number of depreciation years, he says the system will start depreciating the current book value depending on the set dates. Doesn't this violate the accounting principal for managing fixed assets?
Hi,
He can Cancel or reverse that entry and repost but in systematic manner.
if he had posted so many entries for that asset then need to follow some rules.
as at the time of calculation of depreciation the system takes current book value or according depreciation method.
as example if he have month wise depreciation entries. From January to December there are 12 entries for depreciation. so he can not directly do the changes in some of depreciation entries. as like 4th month, 6th, 8th whatever. because if he is doing some changes for 4th month's entry then it will gone wrong because after that period all the entries were posted according to that time's book value.
so now if he want to change 4th months book value then he has to reverse all that entries which were posted after 4th month (including dep, acquisition,etc.)
After that user can post with accurate data.
I hope this will clear.
Best Regards,
Paras Mehan
1st transaction on two lines, without balance account:
- 1st line depreciation with + amount
- 2nd line acquisition with + amount
2nd transaction on one line, with new evaluated amount and balance account.
The client wants the old depreciation entries to remain as they are. then revalue the fixed asset to a new value then start depreciating the new value. this is because the client had earlier underestimated the life span of the asset. After depreciating it to zero, he realized that the asset can still be used for more years to come.
Hi,
If you posted some depreciation then you can reverse it.
Go to that FA Card and in navigate pane click on ledger entries.
Select that depreciation entry and reverse it.
Best Regards,
Paras Mehan
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