1 Overview to Fixed Assets

This chapter contains these topics:

• Section 1.1, "System Integration,"

• Section 1.2, "Fixed Assets Features,"

• Section 1.3, "Fixed Assets Process,"

• Section 1.4, "Fixed Assets Files,"

• Section 1.5, "Fixed Assets Menu Overview."

The JD Edwards World Fixed Assets system is flexible. This flexibility is helpful as many companies delay processing fixed asset information until they are ready to compute period depreciation. For example, you can use the Fixed Assets system's automated asset setup to update asset information on a daily, monthly, quarterly, or annual basis.

1.1 System Integration

The JD Edwards World Fixed Assets system links to many of the other systems that your company uses within JD Edwards World. System integration helps ensure that asset information and account transactions are consistent. You need to enter fixed asset and account information only once throughout your company. This saves considerable time and money, especially when you need to record numerous and complex business transactions daily, and update or revise asset information, such as depreciation rates and account numbers.

The Fixed Assets system is integrated with the following JD Edwards World systems:

Table	Description
Address Book	Fixed Assets accesses the Address Book system to retrieve up-to-date name and address information for: Tax authorities Lessors, financiers, and insurers Employees responsible for the asset
General Accounting	The Fixed Assets and General Accounting systems access and store detailed transaction information in the same table, the Account Ledger (F0911). To maintain integrity between the two systems, you process all transactions through both the general ledger (G/L) and fixed assets.
Procurement	To keep company purchases and asset records concurrent and up-to-date, the Fixed Assets and Procurement systems access and store information in both the Account Ledger table (F0911) and the Item Master table (F1201). When you purchase assets, you must create asset master records in the Item Master table to identify the new assets in your system. The system creates the necessary general ledger accounts in the Account Ledger.
Accounts Payable	The Fixed Assets and Accounts Payable system are integrated through the Account Ledger table (F0911). You can enter charges associated with fixed assets through Accounts Payable. The system automatically enters the asset number from the purchase order to the accounts payable voucher and updates the Account Ledger table.

The following graphic shows the integration of the Fixed Assets System with other systems within JD Edwards World.

Figure 1-1 Integration of the Fixed Asset System

Description of "Figure 1-1 Integration of the Fixed Asset System"

1.2 Fixed Assets Features

The Fixed Assets system includes the following features:

• Multiple depreciation books and methods

• Automated asset setup

• Asset search and location

• Insurance, financing, and warranty information

• Asset transfers, splits, and disposals

• Asset reports (standard and user-defined)

1.2.1 Multiple Depreciation Books and Methods

You can maintain multiple sets of depreciation books for an asset. You can depreciate assets in different ways for different purposes. For example, you might set up the books for an asset to reflect a three-year life for taxation purposes and a five-year life for financial statement purposes. Or, you might have a set of depreciation books for different currencies.

For each set of books that you maintain for an asset, you can assign null depreciation and either a user-defined depreciation method or one of the following 18 predefined depreciation methods:

• Straight line

• Sum of the year's digits

• 125% declining balance to cross-over

• 150% declining balance to cross-over

• Double declining balance to cross-over

• Fixed percent on declining balance

• Accelerated cost recovery system (ACRS) standard

• ACRS optional

• Units of production

• Modified accelerated cost recovery system (MACRS) luxury cars - domestic

• Fixed percent of luxury cars - foreign

• MACRS standard

• MACRS alternative

• ACRS alternate real property

• Fixed percent of cost

• Fixed percent on declining balance to cross-over

• Alternative minimum tax (AMT) luxury autos

• Adjusted current earnings (ACE) luxury autos

You can calculate depreciation daily, weekly, monthly, quarterly, or annually. You can also base your depreciation calculations on a 4-4-5 fiscal pattern or a 13-period pattern.

Additionally, you can automatically generate depreciation to multiple accounts which share assets using the Depreciation Expense Allocation.

1.2.1.1 User-Defined Depreciation

Although the JD Edwards World Fixed Assets system provides a wide range of depreciation rules, you might need a specific depreciation combination other than those provided with the standard depreciation rules. With user-defined depreciation, you can substitute various depreciation conventions, formulas, and spread patterns to define depreciation methods specific to your company without custom programming. For example, you can copy an existing rule and modify it to create a depreciation method for your specific needs.

You can set up user defined depreciation methods to establish:

• User-specific depreciation formulas without custom program modifications

• User-specific depreciation rules and conventions

• Depreciation methods for specific categories of assets

• Specific depreciation methods for assets placed in service during certain periods

• Specific depreciation methods for certain years

1.2.2 Automated Asset Setup

You can use default rules to define default depreciation instructions for individual asset cost accounts by company. When you add newly acquired assets to the Fixed Assets system, the information you establish in default rules is included automatically in the new asset records. You can override the defaults for special cases. Using default rules saves time, especially if you frequently add assets to the system. You can define default values for:

• Accounting class

• Equipment class

• Depreciation accounts

• Revenue accounts

• Depreciation information

1.2.3 Asset Search and Location

You can use the system's search capabilities to locate assets based on:

• Company

• Equipment status

• Description

• Responsible business unit

• Current location

• First 10 category codes

You can also track the history of an asset's movement from location to location.

1.2.4 Insurance, Financing, and Warranty Information

You can record and access the insurance information for an asset, such as insurance company, policy number, premium cost, value, and replacement cost. You can also account for leased and mortgaged assets and track monthly payments, purchase options, and contract information.

Additionally, you can ensure that you utilize all services with a warranty, track expirations, costs, and claim information.

1.2.5 Asset Transfers, Splits, and Disposals

You can use the Fixed Assets system to record asset transfers, splits, and disposals in your accounting ledgers.

Action	Description
Asset transfers	You can transfer assets from one account to another or from one business unit and account to another. You can transfer assets individually or in groups. You can also use the transfer program to change asset information globally, without actually transferring assets.
Asset splits	You can split an asset into one or more new assets. The system prorates the asset's cost and accumulated depreciation to the new assets and creates the appropriate journal entries. Use asset splits when you want to dispose of or transfer part of an asset.
Asset disposals	You can dispose of assets individually or in groups. The system automatically creates the journal entries for each asset disposal based on your specifications.

1.2.6 Fixed Asset Reports

You can print two types of fixed asset reports:

Report	Description
Data Record Extraction and Management (DREAM) Writer	Use this report writer to select and sequence the data that you want to appear on a predefined report. You can use DREAM Writer to: Compile depreciation schedules and projections Report asset master information Print transaction ledgers, reconciliation, and retirement analyses Prepare property tax worksheets to use when calculating your property taxes Maintain integrity between the Fixed Assets and General Accounting systems
Spreadsheet Tool for Asset Reporting (STAR)	Use this flexible report writer to retrieve any data from the Item Master table (F1201) and Item Balances table (F1202) that is not included in the predefined reports for the Fixed Assets system. In addition to the numerous user-defined reports that you can create, STAR includes several additional fixed asset reports, such as the Additions and Retirements Report and the Disposal Analysis Report.

1.3 Fixed Assets Process

The following process is an example outline that follows an asset from its purchase to its disposal, and includes the yearly close. Use this example as a guideline only. Specific steps and procedures vary from company to company.

Task	Description
Master and depreciation information	Enter the master information for the newly acquired asset and verify the default depreciation information.
Voucher entry	Enter an accounts payable voucher for the asset.
Post vouchers to the G/L and fixed assets	Post the batch that contains the voucher for the asset.
Compute depreciation	Compute depreciation in preliminary mode to review journal entries that will be posted to fixed assets and the G/L when you compute depreciation in final mode.
Transfer assets	Transfer assets in preliminary mode to review journal entries that will be posted to fixed assets and the G/L when you transfer assets in final mode.
Asset split	Split program automatically creates and posts journal entries to the G/L and then to fixed assets.
Asset disposal	Dispose of asset in preliminary mode to review journal entries that will be posted to G/L and fixed assets when you dispose of assets in final mode.
Annual asset balance close	Close asset balances on a yearly basis, after you run the final depreciation. The close program creates the balance records for the next year with cumulative and net balance forward amounts. The close program also carries forward depreciation information.

Figure 1-2 Asset Flow from Purchase to Disposal

Description of "Figure 1-2 Asset Flow from Purchase to Disposal"

1.4 Fixed Assets Files

The JD Edwards World Fixed Assets system contains both primary and secondary files.

1.4.1 Primary Files

The JD Edwards World Fixed Assets system stores asset and transaction information in three primary files:

File	Description
Item Master (F1201)	Stores basic information about each asset, such as: Asset number Asset description Account coding Category codes
Item Balances (F1202)	Stores the balance amount for each asset account by ledger type for each year. This table also stores the depreciation information for each asset.
Account Ledger (F0911)	Stores audit trails of general ledger journal entries for both the Item Balances table (F1202) and the Account Balances table (F0902).

1.4.2 Secondary Files

The Fixed Assets system also accesses the following secondary files:

• Location Tracking (F1204)

• Item Messages (F1205)

• Units of Production Schedule (F1208)

• Location History Text (F1210)

• Parent History (F1212)

• Default Depreciation Accounts (F12002)

• Depreciation Defaults by Ledger Type (F12003)

• User Defined Depreciation Rules (F12851)

• User Defined Depreciation Annual Rules (F12852)

• User Defined Depreciation Formulas (F12853)

• User Defined Depreciation Spread Formulas (F12854)

• User Defined Codes (F0005)

• Ledger Type Master (F0025)

• Address Book Master (F0101)

• Account Master (F0901)

• Automatic Accounting Instructions (F0012)

• Business Unit Master (F0006)

• Supplemental Data (F12090, F12092, F12093)

• Specification Data (F1216)

• Specification Cross Reference (F1215)

1.5 Fixed Assets Menu Overview

Figure 1-3 Fixes Assets Menu Overview

Description of "Figure 1-3 Fixes Assets Menu Overview"