On this tab, you can specify the changes to accounting parameters of the listed fixed assets that resulted after the capital improvements to the fixed assets were completed.
This tab comprises the following two panes:
- Fixed Assets (the upper pane): Here you can change the accounting parameters for depreciation of the fixed assets after the improvements were competed including capitalization of the costs incurred.
- Costs of Capital Improvements (the lower pane): If the Show Costs of Capital Improvements for the Selected Row option (at the bottom of the form) is selected, this pane shows only the costs for the fixed asset selected in the upper pane. If this option is not selected, the lower pane shows the costs of all improvements to all the fixed assets listed in the upper pane.
The "Capital Improvements to Fixed Asset document (create)" form. The Fixed Asset tab
Click Add on the toolbar to append a line to the document.
In the Fixed Asset subcolumn, select the fixed asset under capital improvements whose accounting parameters and gross costs will be updated. The ID subcolumn shows the unique identifying code assigned to the fixed asset. The Class subcolumn shows the class assigned to the fixed asset.
In the Depreciation Method column, you can view the depreciation method used for the fixed asset depreciation. The following depreciation methods are available:
- Straight Line: To calculate depreciation in equal monthly amounts during the fixed asset useful life.
- Units of Production: To calculate depreciation amounts proportionally to actual usage of the fixed asset.
The Useful Life (Months) subcolumn shows the number of months the fixed asset was planned for usage if the Straight Line depreciation method is selected for the asset.
The Useful Life for Depreciation Calculation subcolumn shows the number of useful life months used for depreciation calculation in the current month. The Remaining Useful Life (Months) subcolumn shows the number of months the asset was planned to be depreciated after the current month if there were no changes.
Use the Revised Useful Life (Months) subcolumn to change the number of months the fixed asset is now being planned for usage with the Straight Line depreciation method selected for the asset depreciation.
If the Units of Production depreciation method is selected for the asset, the next two columns become available.
The UOM / Estimated Production Volume / Accumulated Production Volume column shows the default unit of measure selected for the production method, the estimation of production volume either defined initially or specified in the latest Changes of Fixed Asset Parameters document, and the production volume accumulated since the start of usage.
The Remaining Production Volume subcolumn shows the calculated production volume that is currently available for usage after the improvement. Use the Revised Estimated Production Volume subcolumn to enter the new estimation for the production volume.
The Gross Cost subcolumn shows the gross cost of the fixed asset before the current changes.
The Salvage Value subcolumn shows the salvage value defined earlier for this asset. The salvage value can be used as a base for sale price at the end of its useful life.
Use the Revised Salvage Value subcolumn to enter the new salvage value.
The Depreciable Cost subcolumn is automatically populated with the amount that is equal to difference between the previous Gross Cost and Salvage Value. The Accumulated Depreciation column shows the amount of depreciation accrued over periods of useful life since the start of depreciation. The Current Depreciation Amount subcolumn shows the depreciation amount to be written to expenses in the current month; this amount is calculated using the "old" parameters that were in effect before capital improvements are registered. If this amount is zero in this document, the depreciation for this month will be calculated during the month-end closing process with the revised parameters.
The Net Book Value subcolumn shows the current value of the fixed asset after the changes that is calculated as follows:
NetBookValue = GrossCost-AccumulatedDepreciation-CurrentDepreciationAmount
The Cost of Capital Improvements subcolumn is populated with the total of all costs associated with the fixed assets' improvements decreased by the sum of the Extracted Inventory costs.
The Capitalized Costs subcolumn shows the increase in the Gross Cost due to improvements.
Use the Revised Gross Cost subcolumn to enter the updated gross cost of the asset; by default, it is calculated as the sum of previous Gross Cost and current Capitalized Costs.
By default, the value in the Revised Depreciable Cost subcolumn is calculated as follows:
Revised Depreciable Cost = RevisedGrossCost - (RevisedSalvageValue + AccumulatedDepreciation + CurrentDepreciationAmount)
The Expense GL Account subcolumn shows the default GL expense account selected for transactions with the fixed asset. If needed, you can assign another GL account from the Expenses section of COA.
In the Department subcolumn, you can change the department associated with usage of this fixed asset.
Click a link in the Expense GL Account Dimensions column to open the Dimensions dialog box. Review the default dimensions and make sure that both correct dimensions of the GL Account are selected.
The Dimensions: GL Account dialog box
Click OK to save the selection and close the dialog box.
The GL Accounts column shows the default GL accounts to be used for the fixed asset depreciation as a link. Click the link to open the GL Accounts dialog box. Review and change the accounts if needed.
The GL Accounts dialog box
Click OK to save the selection and close the dialog box.
In the Transaction Content column, provide a brief explanation of these changes.
The pane toolbar buttons
Click Add to add a new fixed asset that was under capital improvements.
Click Calculate to collect the related costs and calculate the default revised accounting parameters for the fixed assets. Then, you can manually make changes to the parameters.
The Costs of Capital Improvements pane
The pane shows the costs which were associated with the fixed assets (listed in the upper pane) in various documents. Click Fill to populate the table.
Note. Currently, only costs of services or labor can be registered as costs of capital improvements to fixed assets. To associate costs with a particular fixed asset, select the Cost of Capital Improvements GL account for recording these costs and select the fixed asset as a cost object in the documents.
If the Show Costs of Capital Improvements for the Selected Row option (at the bottom of the form is selected, this pane shows only the costs for the fixed asset selected in the upper pane. If this option is not selected, the pane shows the costs of all improvements to all the fixed assets listed in the upper pane.
The Fixed Asset column shows the fixed asset associated with a cost.
The Expense Item column shows the expense item with which this cost is associated.
The GL Accounts column shows as a link the default GL account used for recording the cost. Click the link to open the GL Accounts dialog box. Review and change the account if needed.
The GL Accounts dialog box
Click OK to save the selection and close the dialog box.
The Amount column shows the costs of the improvements to the fixed asset within the specified expense item.
The pane toolbar buttons
Click Add to manually add some costs which were not added automatically.
Click Fill to populate the table.