[EM] Asset Setup

Created by Crystal Ann Harvey, Modified on Tue, 14 Oct at 11:55 AM by Crystal Ann Harvey

Use this form to set up assets that you want to depreciate.

Once you set up the appropriate information for each asset (that is, purchase price, depreciation start date, months to depreciate, depreciation method, etc.), you can then calculate the depreciation schedule. The schedule identifies the depreciation amounts to take each month for the life of the asset. When you run the EM Depreciation Processing form, the system uses this schedule to determine the actual depreciation amount to post for the month, quarter, year, or whatever interval you choose.

Note: This feature is NOT designed to do all the depreciation calculations that may be required for tax purposes. It is designed to provide meaningful depreciation figures for purposes of equipment costing, and carry those figures into your General Ledger.

Asset Codes

An asset code identifies the depreciation item you set up for a piece of equipment. More than one depreciation item can be set up for a piece of equipment, each assigned its own asset code. For example, if you do a major rebuild on a piece of equipment, you can set up a second asset item for the same piece of equipment in order to depreciate the rebuilt piece separately. You can set up a single miscellaneous equipment number for all your office equipment, then set up separate assets for each item.

Depreciation Method

The depreciation method determines how the system calculates the depreciation schedule. There are two methods of depreciation available when setting up assets

Straight Line - Use this method to take the same amount of depreciation for each month until the asset is fully depreciated.
Declining Balance (US/CAN) / Diminishing Value (AUS) - Use this method to depreciate larger amounts in the first year and then decrease the amounts in subsequent years. The calculated amounts for each month are based on the total amount to depreciate, the number of months in the depreciation period, and the acceleration factor.

Depreciation Schedule

The depreciation schedule for an asset is displayed on the Schedule tab and is generally used after the schedule has been calculated to override calculated amounts or to enter to-date depreciation amounts when first coming on-line with existing assets.

The following details how to set up new assets when you acquire them.

Open the EM Asset Setup form (Equipment Management > Programs > EM Asset Setup
In the Equipment field, enter the equipment for which to set up an asset or press F4 to select from a list of valid equipment.
In the Asset field, enter a code (alpha or numeric) to represent the asset.
In the Description field, enter a description of the asset.
In the Purchase Price field, enter the purchase price of the asset.
In the Residual Value field, enter the expected value of the asset after it has been fully depreciated.
Note: The system calculates the Total Amount to Depreciate based on the purchase price less the residual value.
For U.S. and Canadian companies:
1. In the First Month to Depreciate field, enter or select the first date for which to calculate depreciation for the asset.
2. In the # of Months to Depreciate field, enter the total number of months for which to calculate depreciation for the asset.
  The system uses this value in conjunction with the First Month to Depreciate to generate the depreciation schedule.
For Australian companies:
1. In the Depreciation Start Date field, enter or select the first date for which to calculate depreciation for the asset.
2. In the # of Months Held field, enter the total number of months from the Depreciation Start Date that this asset will be held.
  The system uses this value in conjunction with the Depreciation Start Date to generate the depreciation schedule.
In the Method field, select the method of depreciation to use for the asset:
- Straight Line - Depreciate the same amount each month.
- Declining Balance (US/CAN) / Diminishing Value (AUS) - Base the monthly depreciation amount for this asset on an acceleration factor (specified in the Factor field).
If you selected the Declining Balance (US/CAN) or Diminishing Value (AUS) depreciation method, use the Factor field to enter the acceleration factor for calculating depreciation (e.g. 1.00, 1.50, 2.00).
If overriding the depreciation accounts for this asset, use the GL Accounts section to indicate the override accumulated depreciation, depreciation expense, and asset GL accounts.
Select Calculate to generate the depreciation schedule for the asset.

If you set up an asset months after you acquire it, the next time you process depreciation, the program will bring it up to date. For example, if you set up an asset in June that you acquired in April, and then run EM Depreciation Processing, the system will post 3 months of depreciation to June.

If you want the depreciated amounts to go to the correct months and those months are still open, process depreciation for each month. If the acquisition dates back to the prior fiscal year, process depreciation for the last month of that year; the depreciation process only looks at one year at a time.