Asset Acquisition

Asset Acquisition is the document that gives an asset its value in one book. It records the cost, the salvage value, the date depreciation starts and, for an asset brought in at go-live, the depreciation already charged. In a book that posts to the general ledger, Save posts the cost. The same screen, with the activity Acquisition Adjustment, adds to the cost of an asset already acquired.

Where

Fixed Asset › Process › Asset Acquisition

Who uses it

The fixed asset accountant

When

Once per asset and book when the asset is put to use; again for each addition to its cost

Needs first

Asset Master, an Asset Book on the asset's group, a transaction journal for this screen, and the Fixed Assets posting profile

What it is for

An asset card has no value. This document puts it on the books: one live acquisition per asset per book. From then on the asset is picked up by every Asset Depreciation run of that book.

The rule people get wrong: the method, frequency, life and rate are copied onto the acquisition at the moment it is made, from the book's profile and the asset's group. Later changes to the group or the profile do not reach it.

The two activities

• Acquisition - the first entry of the asset in the book. Shows the cost, salvage, depreciation start and the Depreciation Profile tab. The amount must be more than zero.
• Acquisition Adjustment - adds an amount to the cost of an asset already acquired in the book. Shows the amounts only; its whole amount is added to the value still to depreciate, over the life that is left.

A third activity, Acquisition Adjustment - Initial, is offered by the list. The business layer gives it no rule of its own: none of the checks of the other two apply to it.

Every field in plain words

Header

Posting Date, Transaction Journal, Activity, Asset and Asset Book are chosen before Create and are locked after it.

Field	What it means	What to put
Transaction	The document number	Given on Create
Posting Date	The date of the voucher	Required. Fills Acquisition Date, Run Depreciation From Date and the financial year and period
Transaction Journal	The journal the voucher is made in	Required. Only journals set up for this screen and valid on the posting date
Posting Status	Posted, or a parked status the journal allows	Filled from the journal's default. Only a posted acquisition is depreciated
Activity	Acquisition or Acquisition Adjustment	Required
Asset	The asset	Required. For Acquisition, only assets with no acquisition yet; for an adjustment, only assets that still carry a value
Asset Group	The asset's group	Filled from the asset
Asset Book	The book	Required. Only the books on the asset group's Asset Book tab
Notes	The voucher's header text	Free text. Required when the journal asks for header text
Journal, Journal Indicator, Financial Year, Financial Period	From the journal and the posting date	Filled in
Reverse Voucher No, Reverse Date, Reverse Reason, Remarks	Filled when the document is reversed	Shown on a saved document

Basic tab

Field	What it means	What to put
Acquisition Date	The day the asset was acquired	Defaults to the posting date. A date you type stays when the posting date changes
Offset Account	The account the cost is credited to	Required. For an Acquisition in a book that is not Opening, it is proposed from the asset group's acquisition clearing account on the Fixed Assets posting profile
Acquisition Amount	The cost	Required, more than zero for an Acquisition. Proposed as the asset's Quantity times Unit Cost
Salvage %	The share of the cost left at the end of life	10. Not more than 100
Salvage Amount	Acquisition Amount times Salvage %	Worked out
Depreciation On	Acquisition Amount less Salvage Amount: what will be depreciated	Worked out
Run Depreciation From Date	The first day depreciation counts from	Defaults to the posting date. Not before Acquisition Date
Initial Depreciation Amount	Depreciation already charged before this acquisition	For assets taken on at go-live. Shown only for an Acquisition, and only when the asset was not made from a purchase receipt. Not more than Acquisition Amount

Depreciation Profile tab

Filled from the book and the group when the document is created. Read-only.

Field	Comes from
Depreciation Profile	The asset book
Depreciation Method	The book's profile
Depreciation Frequency	The book's profile
Depreciation Percentage	The asset group. Shown for reducing balance only

The asset life (from the group) and the rate are kept on the document but not shown. The currency fields are hidden: an acquisition is in the company's own currency, at a rate of 1.

How to configure it

1. A transaction journal must exist for this screen, with the posting statuses the company wants (Posted, and a park status if acquisitions are checked before posting).
2. On the Fixed Assets posting profile, every asset group needs its asset cost line and its acquisition clearing line for the activity Acquisition. See General ledger screens.
3. Field rules per company (a mandatory Notes, a default journal) are set on Fixed Assets Setting.

The arithmetic

• Salvage Amount = Acquisition Amount x Salvage % / 100
• Depreciation On = Acquisition Amount - Salvage Amount
• For straight line, the document keeps a rate per period of 1 / (life in years x 12 / months per period).
• For an adjustment, the whole amount is added to the value to depreciate: no salvage, no initial depreciation.

Scenarios

• A delivery van bought for 4,000,000 and received through purchasing. Make the card with Asset In Bulk, then Acquisition in the accounting book. The cost and the clearing account come in by themselves; Save posts the cost against the clearing account the receipt used.
• A building owned for six years when Businessflo goes live. Acquisition with Acquisition Amount the original cost, Initial Depreciation Amount the depreciation charged so far, Run Depreciation From Date the go-live date, in a book with Opening ticked.
• A new engine fitted to a truck already on the books. Acquisition Adjustment on the truck, amount the engine's cost. It is spread over the truck's remaining life from the next run.
• An adjustment dated in a month already depreciated. The screen warns "Back-dated adjustment": past periods are not worked out again; only depreciation still to come changes. Reverse the later runs first if the earlier date must count.

What it is connected to

• Asset Master supplies the asset, its quantity and unit cost.
• Asset Group supplies the books, the life and the rate.
• Asset Book supplies the profile, and decides through Post To General Ledger whether a voucher is made.
• Asset Depreciation depreciates every posted acquisition.
• Asset Retirement takes units of the asset out.
• What posts in assets and projects.

If something looks wrong

• "Asset Book cannot be empty" or "Asset cannot be empty". Pick both before Create.
• "Acquisition Amount must be greater than zero". An Acquisition needs a cost.
• "Depreciation Method: ... is not calculated yet; use Straight Line (SLM) or Reducing Balance (RBM)". The book's profile carries another method. Fix the Depreciation Profile.
• "Asset: ... is already acquired in Asset Book: ... by ...". The asset already has a live acquisition in this book. Use Acquisition Adjustment, or reverse the first one.
• "Acquisition Adjustment Amount cannot be greater than Acquisition Amount". Initial Depreciation Amount is more than the cost.
• "Run Depreciation From Date cannot be less than Acquisition Date". Move the start date on or after the acquisition date.
• "Salvage Percentage cannot be greater than 100".
• "Financial Year cannot be empty" or "Financial Period cannot be empty". The book posts to the general ledger and the posting date falls outside the fiscal calendar.
• "Straight line depreciation needs Asset Life, a Monthly / Quarterly / Half-Yearly / Yearly frequency and a Depreciation On Amount". The asset group has no life, or the profile no usable frequency.
• "You Cannot Create Asset Acquisition before this ...". An adjustment is dated before the asset's last acquisition, depreciation or retirement entry. Date it on or after that day.
• "You Cannot Create Asset Acquisition After this ...". A straight-line asset's life has ended on that date. Nothing is left to spread an adjustment over.
• "No Asset Found. You cannot create Transation." An adjustment on an asset with no live acquisition in this book.
• "Back date not allowed". The journal limits how far back a posting date may go.
• "Journal Cannot be Empty." Pick the Transaction Journal.
• Reverse is refused: "Asset cannot be reversed, following depreciations have been run against it : ...". Reverse those depreciation runs first. The same message names adjustments, a sale or a retirement when those exist.
• "Reverse Date: ... cannot be less than Posting Date: ...". Reverse on or after the posting date.
• "Only Posted Vouchers can be reversed". A parked acquisition is deleted, not reversed.
• "Posted transaction cannot be delete". A posted acquisition is reversed, not deleted.
• The asset I want is not in the Asset list. For an Acquisition the list hides every asset that already has an acquisition, in any book.