ACS Version Fixed Assets

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1 ACS Version Fixed Assets

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3 Table Of Contents 1. Fixed Assets 1 Fixed Assets Overview... 1 Fixed Assets Startup Outline... 1 Setting Program Defaults... 2 Getting an Overview of the Fixed Assets Setup Window... 2 Using the Setup Option... 2 Adding Assets... 3 Defining Fixed Asset Lists... 3 Adding Asset Categories... 5 Adding Conditions... 7 Adding Tax Districts... 8 Adding Locations Adding Types Getting an Overview of Fixed Assets Adding an Asset Adding a Category to an Asset Setting Up the Depreciation Tab Adding a Maintenance Record Printing a Maintenance Report for an Item Managing Asset Information Depreciation Methods Understanding the Depreciation Formulas Straight Line Depreciation Double Declining Balance Depreciation Sum of Year's Digits Depreciation Custom Depreciation Calculating and Posting Depreciation Enter/Post Depreciation Fixed Assets Posting Outline Calculating Depreciation Clearing Unposted Calculations Printing a Depreciation Journal Posting Depreciation Period End Procedures Month End Procedures Closing the Current Month Labels About Fixed Asset Labels Fixed Assets Label Layout Viewing a List of Available Labels Getting an Overview of the Label Layout Customizing and Printing Fixed Assets Labels Printing Fixed Asset Labels Printing Labels for Unassigned Item Numbers Reports Printing a Report Previewing Reports Viewing the Available Fixed Assets List Reports Report Options Scanning Fixed Assets About the Portable Bar Code Scanner Understanding the Bar Code Scanner Utilities Understanding the Import File Format Adding New Assets Using the Bar Code Scanner iii

4 ACS Version Fixed Assets Maintaining Assets Using the Bar Code Scanner Importing Data Using the RS232 Cable Importing Data Using a Keyboard Wedge Glossary Index 59 iv

5 Fixed Assets Fixed Assets Overview The ACS Fixed Assets module is a management system in which you can keep track of valuable items and equipment. Your organization's fixed assets represent a large financial investment. The cost of acquiring, maintaining and replacing these assets, along with depreciation expense, have a substantial impact on your financial growth. Managing these assets as simply and easily as possible is critical. The ACS Fixed Assets module provides the tools to accomplish this. In Fixed Assets, you can create lists of specific items in your inventory. For each asset, you can record important information such as acquisition date, cost, maintenance, and useful life. You can then print reports based on the entered information. You can also select from among various depreciation methods, or create your own depreciation table. ACS can then calculate the depreciation and post it to the general ledger. Fixed Assets Startup Outline To begin using the ACS Fixed Assets module, use the following start-up outline: 1. Configure the G/L Interface. 2. Set up conditions. 3. Set up departments. 4. Set up tax districts. 1

6 ACS Version Fixed Assets 5. Set up asset types. 6. Set up locations. 7. Set up custom depreciation methods. 8. Set up asset categories. 9. Enter assets. You are now ready to calculate and post depreciation. Setting Program Defaults Getting an Overview of the Fixed Assets Setup Window In the Fixed Assets Setup window, the following fields are available: Fixed Assets Setup Posting Month Displays the current posting month. To change the month, click the down arrow and select a month in the drop-down list. Posting Year Displays the current posting year. To change the month, click the down arrow and select a year in the drop-down list. Default G/L Source Enter a general ledger transaction source to use for posting depreciation. Click the down arrow to select a transaction source in the drop-down list. Auto Assign Item Number Select to automatically assign the next available item number to a new fixed asset. Next Item Number Displays the next item number for fixed assets. Click in the field and enter the number that you want to automatically assign to the next fixed asset you add. Using the Setup Option You can use the Setup option to select your default posting information. Selecting the posting information saves you time because this information displays in the Add and Edit windows for you. You only need to verify that the information is correct and change it when necessary, such as when you want to post to a period other than the current one. To select the default posting information 1. Under Advanced Tools, click the Settings tab. 2. In the drop-down list, select Fixed Assets. 4. Make the selections that you want in each of the fields. For more information on these fields, see Getting an Overview of the Fixed Assets Window. 2

7 Fixed Assets 5. Click OK. Adding Assets Defining Fixed Asset Lists Understanding the Add/Edit Asset Categories Window Use the Add/Edit Asset Categories window to add asset categories or update existing asset categories. When adding a new asset category, you can enter general information about the category, select a depreciation method, and select a frequency for the depreciation. Asset Categories Category Code Enter a unique identifier for the asset category. The identifier is a three-character alphanumeric user-defined code. Active Select the status of the asset category. Valid statuses are: Active The asset category displays in lists. Not Active The asset category does not display in lists. Description Enter a label or name for the asset category. Life (In Years) Enter the estimated number of years of usefulness remaining for the assets in the category. Ignore Acquire Date Allows you to disregard the acquire date when calculating depreciation. Asset Account Enter the general ledger account code for the assets to which you want to post accumulated depreciation. To select an account in the Account Lookup window, click Lookup. Expense Account Enter the general ledger expense account code to which you want to post depreciation expense. To select an account in the Account Lookup window, click Lookup. Depreciation Method Straight Line To use the Straight Line Depreciation method, select the check box. Double Declining Balance To use the Double Declining Balance Depreciation method, select the check box. Sum of Year's Digits To use the Sum of Year's Digits Depreciation method, select the check box. Custom Method To use a customized depreciation method, select the check box. In the drop-down list, you can select one of the following: Accelerated Depreciation Decelerated Depreciation Your own method 3

8 ACS Version Fixed Assets Frequency Monthly To calculate and apply depreciation on a monthly basis, select the check box. Yearly To calculate and apply depreciation on a yearly basis, select the check box. Options Add Another To add another asset category, select the check box. Understanding the Add/Edit Condition Records Window Use the Add/Edit Condition Records window to add a condition or to update an existing condition. Conditions are assigned to assets on the Asset Info tab in the Add/Edit Fixed Assets Window. Condition Records Condition Code Enter a unique identifier for the condition record. The identifier is a three-character alphanumeric user-defined code. Active Select the current status of the condition record. Valid statuses are: Active The condition record displays in lists. Not Active The condition record does not display in lists. Condition Description Enter a label or name for the condition record. Options Add Another To add another condition record, select the check box. Understanding the Add/Edit Tax District Records Window Use the Add/Edit Tax Districts window to add a tax district or update an existing tax district. Examples of tax districts include entities such as a city, a county, or a state. Tax District Records Tax District Code Enter a unique identifier for the tax district record. The identifier is a three-character alphanumeric user-defined code. Active Select the current status of the tax district record. Valid statuses are: Active The tax district displays in lists. Not Active The tax district does not display in lists. Tax District Description Enter a label or name for the tax district. Options Add Another To add another tax district record, select the check box. 4

9 Fixed Assets Understanding the Add/Edit Location Records Window Use the Add/Edit Locations window to add a location or update an existing location. Locations are assigned to assets on the Asset Info tab in the Add/Edit Fixed Assets window. Location Records Location Code Enter a unique identifier for the location record. The identifier is a three-character alphanumeric user-defined code. Active Select the status of the location record. Valid statuses are: Active The location record displays in lists. Not Active The location record does not display in lists. Location Description Enter a label or name for the location record. Options Add Another To add another location record, select the check box. Understanding the Add/Edit Type Records Window Use the Add/Edit Type Records window to create a type or update an existing type. Type Records Type Code Enter a unique identifier for the type record. The identifier is a three-character alphanumeric user-defined code. Active Select the status of the type record. Valid statuses are: Active The type record displays in lists. Not Active The type record does not display in lists. Type Description Enter a name for the type record. Options Add Another To add another type record, select the check box. Adding Asset Categories Updating an Asset Category You can update an asset category at any time. The updated information displays when the category is selected for new or existing assets. For those assets with the category currently assigned, you must update the category information on the Depreciation tab of the asset in Add/Edit Fixed Assets. For information on updating an asset, see Updating an Asset. To update an asset category 1. Under Advanced Tools, click the Define Lists tab. 5

10 ACS Version Fixed Assets 2. In the drop-down list, select Fixed Assets. 4. Select Asset Categories, then select the asset category you want to change. 5. Click Edit. 6. Enter the revised information, and click OK. Deleting an Asset Category You can delete an asset category that is no longer in use. If assets are associated with the asset category, you receive a prompt to clear the asset category from all assets before deleting it. If you decide that you do not want to delete the category, click No. To delete an asset category 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Asset Categories, then select the asset category you want to delete. 5. Click Delete. 6. Click Yes. Printing an Asset Category List You can preview or print the Asset Category List in the Define Lists window. When you select to print the report, you can select each or all of the following options: Include Detail The code and description of each asset category record is included in the report. For each code, all assets with the assigned asset category is listed with the asset item number and description. Include Inactive Lists Any asset category records that are not active are included in the report. The non-active records are marked with an asterisk (*). Preview Displays the report before printing. To print an Asset Category List 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 6

11 Fixed Assets 4. Select Asset Categories, then click Print. 5. Optional: Select as many of the following options as you want to include in the Asset Category List. Include Detail Include Inactive Lists 6. Click Print. Adding Conditions Updating a Condition You can update a condition record at any time. Changes that you make to a condition display on new or existing assets when you select the condition. For those assets with the condition currently assigned, changes to the description display immediately. To update a condition 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Conditions, then select the condition you want to change. 5. Click Edit. 6. Enter the revised information, and click OK. Deleting a Condition You can delete a condition that you no longer plan to use. If assets are associated with the condition, you receive a prompt to clear the condition from all assets before deleting it. If you decide that you do not want to delete the condition, click No. To delete a condition 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Conditions, then select the condition you want to delete. 5. Click Delete. 6. Click Yes. 7

12 ACS Version Fixed Assets Printing an Asset Condition List You can preview or print the Asset Condition List report at any time. When you select to print the report, you can select each or all of the following options: Include Detail The code and description of each condition record is included in the report. For each code, all assets with the assigned condition is listed with the asset item number and description. Include Inactive Lists Any condition records that are not active are included in the report. The non-active records are marked with an asterisk (*). Print Bar Code A bar code for each condition record is included in the report for scanning. Preview Displays the report before printing. To print an Asset Condition List report 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Click Print. 5. Optional: Select as many of the following options as you want to include on the Asset Condition List: Include Detail? Include Inactive Lists? Print Bar Code? 6. Click Print. Adding Tax Districts Updating a Tax District You can update a tax district record at any time. Changes made to a tax district description are updated immediately on the asset records to which the tax district is assigned. To edit a tax district 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Tax Districts, then select the tax district record you want to change. 8

13 Fixed Assets 5. Click Edit. 6. Enter the revised information, and click OK. Deleting a Tax District You can delete a tax district that is no longer in use. If assets are associated with the tax district, you receive a prompt to clear the tax district from all assets before deleting it. If you decide that you do not want to delete the tax district, click No. To delete a tax district 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Tax Districts, then select the tax district you want to delete. 5. Click Delete. 6. Click Yes. Printing an Asset Tax District List You can preview or print the Asset Tax District List report at any time. When you select to print the report, you can select the following options: Include Detail The tax district code and description is included for each record. For each code, all assets with the assigned tax district is listed with the asset item number and description. Include Inactive Lists Any tax district records that are not active are included in the report. The non-active records are marked with an asterisk (*). Preview Displays the report before printing. To print an Asset Tax District List 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Tax Districts, then click Print. 5. Optional: Select as many of the following options as you want to include in the report: Include Detail? Include Inactive Lists? 9

14 ACS Version Fixed Assets 6. Click Print. Adding Locations Updating a Location You can update a location at any time. Changes made to a location description are updated immediately on the asset records to which the location is assigned. If you are using bar code labels, you can print a new bar code list for the assets in the updated location. To update a location 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Locations, then select the location record you want to change, 5. Click Edit. 6. Enter the revised information, and click OK. Deleting a Location You can delete a location that is no longer is use. If assets are associated with the location, you receive a prompt to clear the location from all assets before deleting it. If you decide that you do not want to delete the location, click No. To delete a location 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Locations, then select the location you want to delete. 5. Click Delete. 6. Click Yes. Printing an Asset Location List You can preview or print the Asset Location List report at any time. When you select to print the report, you can select each or all of the following options: Include Detail The code and description of each location record is included in the report. For each code, all assets with the assigned location is listed with the asset item number and description. 10

15 Fixed Assets Include Inactive Lists Any location records that are not active are included in the report. The non-active records are marked with an asterisk (*). Print Bar Code A bar code for each location record is included in the report for scanning. Preview Displays the report before printing. To print an Asset Location List report 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Click Print. 5. Optional: Select as many of the following options as you want to include in the Asset Location List report. Include Detail Include Inactive Lists Print Bar Code 6. Click Print. Adding Types Updating a Type You can update an asset type at any time. Any changes you make to the type description are updated in the fixed assets records immediately. To update a type 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Types, then select the type record you want to change. 5. Click Edit. 6. Enter the revised information, and click OK. Deleting a Type You can delete a type that is no longer in use. If assets are associated with the type, you receive a prompt to clear the type from all assets before deleting it. If you decide that you do not want to delete the type, click No. 11

16 ACS Version Fixed Assets To delete a type 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Types, then select the type you want to delete. 5. Click Delete. 6. Click Yes. Printing an Asset Type List You can preview or print the Asset Type List in the Define Lists window. When you select to print the report, you can select the following options: Include Detail The code and description of each type record is included in the report. For each code, all assets with the assigned type is listed with the asset item number and description. Include Inactive Lists Any type records that are not active are included in the report. The non-active records are marked with an asterisk (*). Preview Displays the report before printing. To print an Asset Type List 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Types, then click Print. 5. Optional: Select as many of the following options as you want to include in the report: Include Detail Include Inactive Lists 6. Click Print. Getting an Overview of Fixed Assets You can use Add/Edit Fixed Assets to track all of your organization's fixed assets. This includes general information such as the purchase or acquired date, serial number, and condition. You can also set up each asset's depreciation method and other base-line information, as well as keep track of maintenance information. 12

17 Fixed Assets You can print labels for your fixed assets and reports for performing inventory. You can use a bar code scanner to scan the labels and import the information to ACS. Adding an Asset The Asset Info tab lists general information about the asset. When adding an asset, you must complete both the Asset Info tab and the Depreciation tab. Historical cost and depreciable basis are normally the same amount for new items. The depreciable basis is normally less than the historical cost for donated items. Depreciable basis and salvage value are not the same amount. To add an asset 1. Under Manage Records, click the Records tab. 2. In the drop-down list, select Add/EditFixed Assets. 4. Select Add. 5. Enter an item number. If the Auto Assign Item Number option is selected in Fixed Assets Setup, the next available number displays in the Item Number field. 6. Enter an description of the item. 7. Enter general information for the asset. Enter the manufacturer or make of the item. Enter the model of the item. Select an asset type. In the Quantity box, type or select the quantity of the asset. Enter the place where the item is located. Click the down arrow to select a location in the drop-down list. Enter the serial number of the item. Enter the condition of the item. Click the down arrow to select a condition in the drop-down list. 8. If necessary, enter other optional information. Enter a department, or select a department in the drop-down list. Enter a tax district, or select a tax district in the drop-down list. Enter a description of the warranty information. Enter the warranty expiration date, or select a date in the calendar. 9. Enter cost information for the asset. 13

18 ACS Version Fixed Assets Enter the date you purchased or acquired the asset. Click the down arrow to select a date in the calendar. Enter the last date of the asset's useful life (the date you plan to retire the asset). Click the down arrow to select a date in the calendar. Enter the amount you paid for the asset. If the asset was donated, enter the value of the item at the time of acquisition. Both are considered the historical cost. Enter the amount from which to calculate depreciation (depreciable basis). Enter the estimated amount the asset will hold after the asset's useful life expires (salvage value). Enter the total, cumulative amount of depreciation expense that you have recorded since you acquired the fixed asset. Set up the Depreciation tab. Adding a Category to an Asset You can create asset categories to set depreciation defaults for fixed assets. You can add as many asset categories as you need for you organization. Once you add the category, you cannot change the code. Categories provide a way to set depreciation defaults for your assets. When you set up a category, you can select default accounts, the life of assets, and depreciation methods, among other options. For example, you can set up a category named "Computers" and assign a life of three years, assign asset and expense accounts, and select a frequency and depreciation method. The next time you add a computer to your list of assets, you can select the category Computer on the Depreciation tab and the default values are set. However, you are not required to use the default values. To add an asset category 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Under Available Lists, select Asset Categories. 5. Click Add. 6. Enter the information in each field. For more information, see Understanding the Add/Edit Asset Categories Window. 7. Optional: Select Add Another to add another asset category. 8. Click OK. 14

19 Fixed Assets Setting Up the Depreciation Tab The Depreciation tab in Add/Edit Fixed Assets contains information about the asset's depreciation schedule and general ledger accounts. To set up the Depreciation tab 1. After setting up the Assets Info tab, click the Depreciation tab. 2. Select an asset category. Click the down arrow to select a category in the drop-down list. Note If you select an asset category, the following fields are populated with the category s defaults: Life, Asset Account, Expense Account, Frequency, and Depreciation Methods. 3. Enter the asset's expected life. Click the up and down arrows to increase or decrease the number of years. 4. Select Ignore Acquire Date if you want to disregard the acquire date when calculating depreciation. 5. Enter the general ledger asset account. Click Lookup to select an account in the Account Lookup window. 6. Enter a general ledger expense account. Click Lookup to select an account in the Account Lookup window. 7. Select a depreciation frequency, Monthly or Yearly. 8. Select a depreciation method. 9. If you selected the Custom Method option, click the down arrow to select a depreciation method in the drop-down list. 10. Click OK. Adding a Maintenance Record You can keep track of maintenance performed on a specific asset. To add a maintenance record 1. Under Manage Records, click the Records tab. 2. In the drop-down list, select Add/EditFixed Assets. 4. Select the asset to which you want to add a maintenance record. 5. Click Edit. 6. Click the Maintenance tab. 15

20 ACS Version Fixed Assets 7. Click Add. 8. Enter a description of the maintenance performed. 9. Enter the scheduled completion date of the maintenance procedure. Click the Down Arrow to select a date in the calendar. 10. Enter the cost of the maintenance procedure. 11. When maintenance procedure is complete, select the Completed option. 12. Click OK. 13. Click OK again. Note You must click OK twice to save the Maintenance record. Printing a Maintenance Report for an Item You can print a report for the maintenance performed on a single maintenance record. To print a Maintenance Report 1. Under Manage Records, click the Records tab. 2. In the drop-down list, select Add/Edit Fixed Assets. 4. Select an asset. 5. Click the Maintenance tab. 6. Click Print. Managing Asset Information Updating an Asset You can edit an asset record as needed. When changing an asset depreciation method, you may need to make a journal entry to reconcile past depreciation postings. Also, the IRS requires that you use certain depreciation methods for certain types of assets. If you have any questions on the method of depreciation you should use, contact your accounting professional or the IRS at To edit an asset 1. Under Manage Records, click the Records tab. 2. In the drop-down list, select Add/Edit Fixed Assets. 16

21 Fixed Assets 4. Select the asset you want to edit. 5. Click Edit. 6. Make any necessary changes. 7. Click OK. Deleting an Asset You can delete an asset that you no longer need to track. Deleting an asset does not delete previous postings to the general ledger. To delete an asset 1. Under Manage Records, click the Records tab. 2. In the drop-down list, select Add/Edit Fixed Assets. 4. Select the asset you want to delete. 5. Click Delete. 6. Click Yes to delete the asset. Updating a Category When you change the category assigned to an asset, all fields related to the category update also. The information in the category does not change any posted depreciation amounts. The changes take affect the next time you calculate depreciation for the asset. You can change the category assigned to an asset at any time. To update a category 1. Under Managed Records, click the Records tab. 2. In the drop-down list, select Add/Edit Fixed Assets. 4. Select the asset you want to change, then click Edit. 5. Click the Depreciation tab. 6. Click in the Asset Category list to select a new category.. 7. Click OK. 17

22 ACS Version Fixed Assets Removing a Category from an Asset You can delete an asset category that is no longer needed. If assets are associated with the asset category, you receive a prompt to clear the asset category from all assets before deleting it. Click Yes to clear the asset category from assets, or click No to continue without deleting the asset category. To delete an asset category 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Under Available Lists, select Asset Categories. 5. Select the category you want to remove, and click Delete. 6. Click Yes to the confirmation message. Updating a Maintenance Record You can edit a maintenance record if information such as completed date or cost has changed. To edit a maintenance record 1. Under Manage Records, click the Records tab. 2. In the drop-down list, select Add/Edit Fixed Assets. 4. Select the asset that you want to edit. 5. Click Edit, then click the Maintenance tab. 6. Select the maintenance record you want to edit, then click Edit. 7. Enter the revised information. 8. Click OK. 9. Click OK again. Note You must click OK twice to save the Maintenance record. Deleting a Maintenance Record To delete a maintenance record 1. Under Manage Records, click the Records tab. 2. In the drop-down list, select Add/Edit Fixed Assets. 18

23 Fixed Assets 4. Select the asset that contains the maintenance record you want to delete. 5. Click Edit. 6. Click the Maintenance tab. 7. Select the maintenance record you want to delete. 8. Click Delete. 9. Click Yes to delete the record. 10. Click OK. Depreciation Methods Understanding the Depreciation Formulas Fixed Assets provides three popular methods to calculate depreciation. These methods include both types of depreciation: Straight Line Depreciation and Accelerated Depreciation. The following variables are available to calculate depreciation using the Straight Line Depreciation. Historical Cost (H) This is the original price/value of the fixed asset at the time of its acquisition. Salvage Value (S) The estimated dollar value an asset still holds after its useful life has expired. Useful Life (U) The estimated time, expressed in years, that a fixed asset will hold useful value for an organization. After this period, the asset is usually retired and sold for its salvage value. Straight Line Depreciation uses the following formula: (H - S)/U = A The following variables are used to calculate depreciation using Double Declining Balance Depreciation. Historical Cost (H) This is the original price/value of the fixed asset at the time of its acquisition. Salvage Value (S) The estimated dollar value an asset still holds after its useful life has expired. Useful Life (U) The estimated time, expressed in years, that a fixed asset will hold useful value for an organization. After this period, the asset is usually retired and sold for its salvage value. Accumulated Depreciation (A) Refers to the total, cumulative amount of depreciation expense that has been recorded since the fixed asset was acquired. The purpose is to show how much of the total cost a fixed asset has been depreciated over time. 19

24 ACS Version Fixed Assets Asset Book Value (C) This is the Historical Cost less the Accumulated Depreciation. (C = H - A) Double Declining Balance Depreciation uses the following formula: C * (2/U) = Depreciation Note If no depreciable basis is entered for an asset, historical cost is used to calculate depreciation. If a depreciable basis is entered for an asset, that will be used instead of historical cost. Straight Line Depreciation Depreciation under this method is a function of time rather than use. This method uses a lump sum derived from a mathematical formula based upon the asset's useful life, historical cost, and salvage value. The following variables are used: Historical Cost (H) The original price or value of the fixed asset at the time of its acquisition. Salvage Value (S) The estimated dollar value an asset still holds after its useful life is expired. Useful Life (U) The estimated time, expressed in years, that a fixed asset holds useful value for an organization. After this period, the asset is usually retired and sold for its salvage value. Straight Line Depreciation uses the following formula: (H - S)/U = Accumulated Depreciation For example: You have a van that you purchased for $18,500. You expect the van to have a useful life of 15 years and a salvage value of $9,500. You decide to use the Straight Line Depreciation Method. Item Vehicle Historical Cost $18,500 Salvage Value $9,500 Useful Life 15 years 18,500-9,500 = The accumulated depreciation is $600. This means that each year, a depreciation of $600 is applied to the asset. 20

25 Fixed Assets Double Declining Balance Depreciation The Double Declining Balance depreciation method uses a percentage rate calculated on an asset's useful life and then the percentage is doubled. This percentage is applied to the asset book value at the beginning of the year, but only until the amount is applied to the salvage value. At the end of the asset's useful life, the book value depreciates in the amount necessary to bring the book value to its salvage value. Since the accumulated depreciation changes each year, the asset book value reduces each year, causing decreasing depreciation. The following variables are used: Historical Cost (H) The original price or value of the fixed asset at the time of its acquisition. Salvage Value (S) The estimated dollar value an asset still holds after its useful life has expired. Useful Life (U) The estimated time, expressed in years, that a fixed asset holds useful value for an organization. After this period, the asset is usually retired and sold for its salvage value. Accumulated Depreciation (A) Refers to the total, cumulative amount of depreciation expense recorded since the fixed asset was acquired. The purpose is to show how much of the total cost a fixed asset has depreciated over time. Asset Book Value (C) This is the historical cost less the accumulated depreciation. (C = H - A) Double Declining Balance Depreciation uses the following formula: C * (2/U) = Depreciation For example: You have a video camera that you purchased for $850. You expect it to have a useful life of 10 years and a salvage value of $200. You decide to use the Double Declining Balance Depreciation method. Item Video Camera Historical Cost $850 Salvage Value $200 Useful Life 10 years Year 1 C = C = * (2/10) = 170 The Accumulated depreciation for the first year is $

26 ACS Version Fixed Assets Year 2 C = C = * (2/10) = 136 The accumulated depreciation for the second year is $136. As you can see, the amount to depreciate declines each year. The table below shows the amount the video camera depreciates each year. Year Depreciation Accumulated Depreciation Asset Book Value 1 $ $ $ $ $ $ $ $ $ $87.04 $ $ $69.63 $ $ $55.71 $ $ $22.72* $ $ $0.00 $ $ $0.00 $ $ $0.00 $ $ * The actual amount the formula returns is $ However, this would return an asset book value of $582.62, which is less than the salvage value of $200. Once the salvage value is reached, the asset is no longer depreciated. Sum of Year's Digits Depreciation This method uses a percentage rate calculated on fractions where the numerators are based on the number of years of an asset's useful life, and the denominators are constants based upon the total sum of all the numerators added together. Because the denominator remains constant and the numerator declines each year, the result is a decreasing depreciation expense. The following variables are used: Historical Cost (H) The original price or value of the fixed asset at the time of its acquisition. Salvage Value (S) The estimated dollar value an asset still holds after its useful life is expired. Useful Life (U) The estimated time, expressed in years, that a fixed asset holds useful value for an organization. After this period, the asset is usually retired and sold for its salvage value. 22

27 Fixed Assets Age (Y) The age of the asset, in years. Denominator (N) = [(U + 1)/2] * U Sum of the Year's Digits Depreciation uses the following formula: (H - S) * (U - Y +1) = Depreciation N For example: You buy a new P. A. system for $10,000. You expect it to have a useful life of 10 years and a salvage value of $500. You decide to use the Sum of the Year's Digits Depreciation method. Item P. A. System Historical Cost $10,000 Salvage Value $500 Useful Life 10 years Denominator-[(10+1)/2) * 10 = 55 Year 1 (10, ) * ( ) = The depreciation for the first year is $ Year 2 (10, ) * ( ) = The depreciation for the second year is $ As illustrated, the amount to depreciate declines each year. The following table shows the amount the P.A. System depreciates each year. Year Depreciation Accumulated Depreciation Asset Book Value 1 $1, $1, $ $1, $3, $ $1, $4, $ $1, $5, $ $1, $6, $ $ $7, $ $ $8, $ $ $8, $

28 ACS Version Fixed Assets 9 $ $9, $ $ $9,500.01* $499.99* * Totals do not equal salvage value due to rounding. ACS does not allow the final asset book value to equal less than the salvage amount. Custom Depreciation Understanding the Add/Edit Custom Depreciation Methods Window Use the Add/Edit Custom Depreciation Methods window to add a customized depreciation method or update an existing method. Changes made to an existing depreciation method do not change any depreciation expense or accumulated depreciation amounts that are posted to the general ledger. Only future calculations are affected by the changes. Even though you can enter a percentage to depreciate for years 1 40, you are not required to enter a percentage for each year. However, the percentages you do enter must equal 100. Depreciation Methods Depreciation Code Enter a unique identifier for the depreciation method. The identifier is a three-character alphanumeric user-defined code. Active Select the current status of the depreciation method. Valid statuses are: Active The depreciation method displays in lists. Not Active The depreciation method does not display in lists. Description Enter a label or name for the depreciation method. Year 1 Year 40 Enter the percentage amount by which you want assets to depreciate each year. Remaining Displays the additional percentage amount that you must add to the table. Options Add Another To add another depreciation method, select the check box. Updating a Depreciation Method You can update a depreciation method at any time. When you update a depreciation method, the changes you make effect future calculations only. Any depreciation expense and accumulated depreciation that is already posted to the general ledger is not affected. To update a depreciation method 24

29 Fixed Assets 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Depreciation Methods, then select the depreciation method you want to change. 5. Click Edit. 6. Enter the revised information, and click OK. Deleting a Depreciation Method You can delete a depreciation method that is no longer in use. If assets are associated with the depreciation method, you receive a prompt to clear the method from all assets before deleting it. If you decide that you do not want to delete the depreciation method, click No. To delete a depreciation method 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 4. Select Depreciation Methods, then select the depreciation method you want to delete. 5. Click Delete. 6. Click Yes. Printing a Depreciation Methods List You can preview or print the Depreciation Methods List at any time in the Define Lists window. When you select to print the report, you can select each or all of the following options: Include Detail The code and description of each depreciation method record is included in the report. For each code, all assets with the assigned depreciation method is listed with the asset item number and description. Include Inactive Lists Any depreciation method records that are not active are included in the report. The non-active records are marked with an asterisk (*). Preview Displays the report before printing. To print a Depreciation Methods List 1. Under Advanced Tools, click the Define Lists tab. 2. In the drop-down list, select Fixed Assets. 25

30 ACS Version Fixed Assets 4. Select Depreciation Methods, then click Print. 5. Optional: Select as many of the following options as you want to include in the Depreciation Methods List. Include Detail Include Inactive Lists 6. Click Print. Calculating and Posting Depreciation Enter/Post Depreciation You can use Enter/Post Depreciation to calculate depreciation for your fixed assets and post the depreciation to the general ledger. In Enter/Post Depreciation, you can print a depreciation journal to verify the depreciation calculated, as well as using it as an audit record. When calculating depreciation, ACS compares the depreciation date to the acquisition date. If less than one year has passed since the asset was acquired, ACS divides the yearly amount by 12 and then multiplies by the number of months in service. The result is the correct depreciation amount for the first year. You can use Enter/Post Depreciation to close the current month and change the posting month to the next month. Fixed Assets Posting Outline Use the Fixed Assets Posting Menu to perform the following tasks. Calculate Depreciation Depreciation Journal Post Depreciation Close Current Month Calculating Depreciation Keeping accurate records on the value of your assets is the key when it comes to replacing or disposing of them. Calculating and posting depreciation reduces the value of the asset on your books so you know when the time is right to purchase new equipment. 26

31 Fixed Assets Although you can calculate depreciation at any time, you can make this a part of your period-end procedures, either monthly or yearly. ACS does not update your records until you post the depreciation amount to the general ledger. To calculate the depreciation of your organization s fixed assets 1. Under Manage Records, click the Transactions tab. 2. In the drop-down list, select Fixed Assets Depreciation. 4. Click Calculate Depreciation. 5. Verify the depreciation date. Click the down arrow to select a date in the calendar. 6. Optional: To calculate depreciation for inactive items, select the Depreciate Inactive Items option. 7. Select whether to calculate depreciation for assets whose depreciation is calculated on a Monthly basis, Yearly basis, or both. 8. Click Begin to calculate depreciation. 9. Click OK. 10. After calculating depreciation, you are ready to print the Depreciation Journal. Clearing Unposted Calculations If you find an error in your depreciation calculations, you can clear the calculations and recalculate. To clear unposted calculations 1. Under Manage Records, click the Transactions tab. 2. In the drop-down list, select Fixed Assets Depreciation. 4. Click Calculate Depreciation. 5. Click Clear Current Calculations. 6. Click Yes to clear current calculations. Printing a Depreciation Journal The depreciation journal provides a printed record of your asset depreciation for your files. To activate the Post Depreciation option on the Fixed Assets Posting menu, you must preview or print the Depreciation Journal report, and click OK 27

32 ACS Version Fixed Assets To print a depreciation journal 1. Under Manage Records, click the Transactions tab. 2. In the drop-down list, select Fixed Assets Depreciation. 4. Click Depreciation Journal. 5. Optional: To include assets that have no depreciation in the current set of transactions, select the Include Items with Zero Current Depreciation check box. 6. Optional: Click Preview to view the report. 7. Click Print to print the depreciation journal. 8. Click OK to return to the Fixed Assets posting menu. Posting Depreciation Posting depreciation automatically posts the calculated amounts to the assigned accounts in the general ledger. You must calculate depreciation and print the depreciation journal before you can post depreciation. To post depreciation to the General Ledger module 1. Under Manage Records, click the Transactions tab. 2. In the drop-down list, select Fixed Assets Depreciation. 4. Click Post Depreciation. 5. Verify the posting date. Click the down arrow to select a different date in the calendar. 6. Verify the Post Month/Year. Click the up and down arrows in the Month and Year date boxes to select a different posting period. 7. Select a transaction source. Click the down arrow to select a transaction source in the drop-down list. 8. Enter a reference number. Click Next to automatically assign the next available reference number for the selected transaction source. 9. Enter an explanation. If no description is entered, Explanation defaults to Asset Depreciation (date). 10. Click OK. 28

33 Fixed Assets Period End Procedures Month End Procedures At the end of every month, using the following procedures is necessary for a smooth month-end closing. You must complete these procedures before calculating depreciation for the next period. Calculate Depreciation Print a Depreciation Journal Post Depreciation to the general ledger Print reports Close the Month By following the these steps in the Fixed Assets module, and following a similar procedure for your other ACS Financial modules, you can verify that your transactions are entered properly and your books are accurate. Closing the Current Month You close the current month to change the posting month to the next month, and if necessary, the next year. To close the current month 1. Under Manage Records, click the Transactions tab. 2. In the drop-down list, select Fixed Assets Depreciation. 4. Click Close Current Month. 5. Click Yes. Labels About Fixed Asset Labels You can print 2-Up and 3-Up laser bar code labels to help you keep track of your assets. You can use the Fixed Assets Label Laser options to print bar code labels for previously entered assets. Use the Unassigned Item # Label Laser options to print bar code labels for item numbers that have not been assigned. This option is most useful when you are just beginning to use the ACS Fixed Assets module and assigning item numbers to assets that you have not entered into Fixed Assets. 29

34 ACS Version Fixed Assets What Prints on Fixed Asset Labels? Fixed Asset labels can be customized to display various information. Label information can be changed through Label Layout on the Setup tab. Click to see the information that can be displayed on up to five lines of the Fixed Assets Label Laser labels. Bar Code Item Number Item Description Make Model Type Code/Desc. Quantity Location Code/Desc. Serial Number Condition Code/Desc. Department Code/Desc. Tax District Code/Desc. Warranty Description Warranty Expiration Date Acquired Date Retire Date Category Code/Desc. Depreciation Type Code/Desc. Dataset Name Dataset Phone 1 Click to see the information that can be displayed on up to five lines of the Unassigned Item # Label Laser labels. Bar Code Item Number Dataset Name Dataset Phone 30

35 Fixed Assets Fixed Assets Label Layout To help you keep track of your organization's assets, you can print bar code labels on your laser printer. From the Label Layout option on the Setup tab, you can select the information that you want to display on the labels. You can print 2-Up and 3-Up laser bar code labels for assets that are already in the system. You can also print unassigned item number labels for items that are not yet assigned. This is useful when you are just beginning to use the Fixed Assets module and assigning item numbers to assets. You can choose any five of the following options for the Fixed Assets Label Laser (2-Up and 3-Up) labels: Bar code Item Number Item Description Make Model Type Code/Desc. Quantity Location Code/Desc. Serial Number Condition Code/Desc. Department Code/Desc. Tax District Code/Desc. Warranty Description Warranty Expiration Date Acquired Date Retire Date Category Code/Desc. Depreciation Type Code/Desc. Data set Name Data set Phone 1 You can choose any of the following options for the Unassigned Item # Label Laser labels: Bar code Item Number Dataset Name Dataset Phone 31

36 ACS Version Fixed Assets Viewing a List of Available Labels You can select the report options you want to include when printing your labels. You can print up to five lines of information on each label. For each line of information, you can select one of twenty ACS data fields to print. You can print the ACS field description or a description of your own. The following table lists the label formats that you can print in the ACS Fixed Assets module. Label Fixed Assets Label Laser (2-Up) Fixed Assets Label Laser (3-Up) Unassigned Item # Label Laser (2-Up) Unassigned Item # Label Laser (3-Up) Description Avery 5161 / ACS Address Labels: 4" x 1", Paper Size: 8-1/2" x 11" Letter (2 x 10 labels per sheet). Avery 5160 / ACS Address Labels: 2-5/8" x 1", Paper Size: 8-1/2" x 11" Letter (3 x 10 labels per sheet). Avery 5161 / ACS Address Labels: 4" x 1", Paper Size: 8-1/2" x 11" Letter (2 x 10 labels per sheet). Print for items that are not in Fixed Assets and import using the ACS bar code scanner. Avery 5160 / ACS Address Labels: 2-5/8" x 1", Paper Size: 8-1/2" x 11" Letter (3 x 10 labels per sheet). Print for items that are not in Fixed Assets and import using the ACS bar code scanner. Getting an Overview of the Label Layout You can print 2-Up and 3-Up laser bar code labels to help you keep track of your assets. You can use the Fixed Assets Label Laser options to print bar code labels for previously entered assets. Use the Unassigned Item # Label Laser options to print bar code labels for those items with no assigned item numbers. These options are the most useful when you are just beginning to use the ACS Fixed Assets module and assigning item numbers to assets that are no yet entered into Fixed Assets. You can customize the Fixed Asset labels to display various information. Click the Label Layout button on the Options tab to enter the information that you want to print on the labels. You can add up to five lines of information on each label. You can choose the ACS field to print on each line and select to print the ACS field description, or enter your own text. You can also select to print no information at all on a line. If you select <None> for a line on the label, ACS prints this line as all spaces and the line displays as blank on the label. 32