The Fixed Assets Accounting process is used for managing the fixed assets in a company. The process contains activities for acquisition of objects and importing objects, i.e., transferring fixed assets that have been depreciated in another system. There are also activities for acquisition value adjustments per book, calculation/posting of depreciation, split/move of object, and dispose objects.
Before entering information on the fixed assets, the activities in BDR (basic data requirements) For Fixed Assets Accounting and the activities in BDR For Fixed Assets Object Information must have been checked/supplemented.
In IFS/Fixed Assets several books can be used to defined different accounting principles and depreciation rules. It is also possible to connect each FA book to a specific ledger; i.e., the general ledger or the internal ledger by using book-specific voucher types. If a specific voucher type is connected to a book, this voucher type will be used for book specific postings like depreciations or adjustments. The voucher type controls for which ledger(s) the vouchers will be created. All book-specific vouchers created in Fixed Assets can be transferred to different ledgers (i.e.., General Ledger or Internal Ledger(s)) to be able to create balance sheets and, income statements according to the different accounting principles.
There are a number of predefined events in the system. The Acquisition of Object event means that new investments, such as machinery, are to update IFS/Fixed Assets. When the acquisition has been entered in the system, other events such as the creation of depreciation proposals can be performed. When vouchers for the Acquisition of Object event are updated from the hold table to the general ledger, IFS/Fixed Assets is also updated.
The acquisition value adjustment per book event means that book-specific changes (increases/decreases) of the general acquisition value can be entered and posted. Vouchers are created for the ledgers connected to the book for which the adjustment was entered in Fixed Assets.
If payments are created within IFS Applications, it is possible to initiate automatic transactions which reduce the acquisition values of Fixed Assets objects by the proportionate cash discount.
The Import of Depreciated Objects event means that an object depreciated previously in another system is transferred to IFS/Fixed Assets. Posting of imported objects is entered in a separate window for all objects simultaneously, instead of for individual objects.
The Depreciation event means that depreciation is calculated and posted at the same time for one or more objects/object groups. Depreciation is charged for one book at a time. A depreciation proposal can be created for several years into the future for 'projection purposes.' When the proposal is posted, fixed assets transactions and a voucher is created that is transferred to the hold table in IFS/Accounting Rules or in IFS/Internal Ledger for updating to the general/internal ledger. The user cannot confirm a proposal that includes several years.
The Split of Object event involves dividing it into two parts. In fixed assets and in the general ledger, the acquisition value, the acquisition value adjustments per book and the accumulated depreciation are transferred from the original object to the new object in accordance with specified terms. To split an object into more than two parts, you must carry out the splitting process in several stages. When the split takes place, vouchers are created and placed in the hold table in IFS/Accounting Rules and the connected internal ledgers.
The Move of Object event means changing the code string for the posting of the acquisition value, the acquisition value adjustments per book or the accumulated depreciation. In other words, you move the object’s acquisition value, the acquisition value adjustments per book and accumulated depreciation from one code string to another. A move always generates new vouchers that are placed in the hold tables in the connected ledgers. A move also generates one or more accounting transactions. New object transactions are also created, and the new accounting transactions refer to the new object transactions.
The Move Object operation is available only for active objects, i.e., objects with Active status. The cost side for depreciation cannot be moved. This type of posting is moved by the following chain of activities: 1) cancellation of transaction, 2) correction of posting rules, and 3) new posting of the depreciation.
The Sale of Object event is performed when a fixed asset is sold and compensation is received. The function performs the de-listing of the object in IFS/Fixed Assets and the posting of the event. You cannot perform the Sell Object operation for an object with compensation of zero (0). Instead, the Scrap Object operation must be performed. When the sale takes place, a vouchers are created and placed in the hold table in IFS/Accounting Rules and the connected internal ledgers.
The Transfer of Object event is performed when a fixed asset is transferred from one company to another. There are transfer methods that determines how a transferred asset is capitalized in the receiving company. Basically, an asset can be transferred as a pure transfer where the historical acquisition date, acquisition value and book specific balances such as acquisition value adjustments and accumulated deprecations are transferred with no changes from the sending company to the receiving company. Alternatively, the Transfer Object event can be used to record a sale of fixed asset between two companies where only the transfer amount will be capitalized in the receiving company.
From the sending company's point of view, the function performs a de- listing of the object in IFS/Fixed Assets and the posting of the event, where as in the receiving company, the transferred asset is updated to IFS/Fixed Assets. The inter company receivables and payables are calculated based on the transfer amount and it is optional to handle them using separate posting controls. When a transfer takes place, vouchers are created and placed in the hold table in IFS/Accounting Rules and the connected internal ledgers for both companies.
The Scrap of Object event is performed when a fixed asset is scrapped or sold and no compensation is received. The function performs the de-listing of the object in IFS/Fixed Assets and the posting of the event. When the scrapping takes place, vouchers are created and placed in the hold table in IFS/Accounting Rules and the connected internal ledgers.
After the code string (= transaction) has been created at the various events, it is transferred to the hold table in IFS/Accounting Rules and/or in IFS/Internal Ledger. Transactions in the hold table are then updated in IFS/General Ledger or in IFS/Internal Ledger. The updating routine checks all transactions.
When updating the Acquisition of Object event in IFS/General Ledger, both the fixed assets and the general ledger are updated. For other events, such as scrapping, the fixed assets are updated when the event is confirmed in IFS/Fixed Assets. Also, vouchers are created at that time and transferred to the hold table(s) in the connected ledger(s).
In IFS/Fixed Assets, there is an internal transaction register for object transactions. Each event performed in the component is entered in this register. Furthermore, there is an internal accounting register for accounting transactions. Each entry in the object transactions register, which also generates a voucher, is entered in the register for accounting transactions.
Vouchers created by an event are transferred to the hold table in IFS/Accounting Rules and/or IFS/Internal Ledger. When vouchers for the Acquisition of Object event are updated from the hold table to the general ledger, IFS/Fixed Assets is also updated. Vouchers from IFS/Fixed Assets have function group A.