(COL) Working with Fixed Assets for Colombia

This chapter discusses how to:

Calculate depreciation adjustments for inflation.
Calculate the end of useful life.
Work with cost inflation adjustments.

Calculating Depreciation Adjustments for Inflation for Colombia

This section provides an overview of depreciation adjustments for inflation, lists prerequisites, and discusses how to:

Calculate the depreciation inflation adjustments.
Set processing options for Adjustment by Inflation Depreciation/Amortization (R76C1202).

Understanding Depreciation Adjustments for Inflation

Inflation can have a significant effect on the value of an organization's assets. For accurate financial reporting and income tax, Colombian companies apply annual inflation adjustments to revalue all fixed assets. Inflation adjustments affect the calculation of depreciation and amortization and can result in an increase or decrease of taxable income. You use the asset's adjusted balances to calculate depreciation.

Run the Adjustment by Inflation Depreciation/Amortization report (R76C1202) to calculate the depreciation inflation adjustments for the organization. The report lists detailed and summary information for each asset, including:

Adjustment percentage for the affected year. (Porcentaje de Ajuste Año Gravable [PAAG])
Period.
Values.
Monthly inflation adjustment calculation.

First, you should run the report in proof mode. Carefully review the detailed and summary information for accuracy, and correct any errors, before you run the report in final mode. After you run the report in final mode, post the journal entry that the system generates.

Adjustment by Inflation Depreciation/Amortization (R76C1202)

When you run this report in proof mode, the system:

Validates the accounts to which the system posts the depreciation inflation adjustment journal entries.
Prints a report that shows the amount that will post to each depreciation inflation adjustment account when you run the program in final mode.

This report also shows calculated results.

When you run this report in final mode, the system:

Validates the accounts to which the system posts the depreciation inflation adjustment journal entries.
Prints a report that shows the amount that posted to each depreciation inflation adjustment account, such as the monetary correction amount.

If any errors occur, the depreciation inflation adjustment process will not generate the journal entry.
Creates the depreciation inflation adjustment journal entry and monetary correction.

A processing option specifies the document type for these journal entries. The batch type is G.
Creates records in the Entry Transactions file F0911Z and automatically sends the transactions to the transaction file F0911.
Creates a journal entry that you need to post to the JD Edwards Enterprise One General Ledger and JD Edwards Enterprise One Fixed Assets systems.

After you post the journal entry, the system displays the month inflation adjustment value on the Work with Cost Summary form.

See Verifying Depreciation Information.

See Processing GL to Fixed Assets.

Data Selection for Adjustment by Inflation Depreciation/Amortization

Enter the ledger or ledgers in which you are working in the data selection. Also, enter the account type (CHCD equals (2).

Prerequisites

Before you calculate the depreciation inflation adjustments:

Set up cost accounts by company for depreciation inflation adjustments.
Generate version ZJDE76C12 for the transaction file F0911 from the Journal Entry Batch Processor (R09110Z), with the processing option in final mode, before you run Adjustment by Inflation Depreciation/Amortization in final mode. You need to generate this version so that when the system calculates the depreciation inflation adjustment, it creates the inbound transactions and runs the process in batch mode, using the version ZJDE76C12.

See Processing Batch Journal Entries.

Calculating the Depreciation Inflation Adjustments

Select Fixed Assets (G76C16), Adjustment by Inflation Depreciation/Amortization.

Setting Processing Options for Adjustment by Inflation Depreciation/Amortization (R76C1202)

Set these processing options to specify the mode in which you run the report, the period and fiscal year to use, the PAAG (Porcentaje de Ajuste Año Gravable) to apply, and the GL document type, date and ledger type to use on the Journal Entry.

Process

Use these processing options to specify the mode in which to run the report and the default values to use.

1. Preliminary (' ') / Final (1)	Specify whether to run the report in preliminary/proof or end/final mode. Values are: Blank: Preliminary/proof mode. 1: End/final mode.
2. Period No Ap (accounting period number)	Specify the number that indicates the current accounting period. The system uses this period number to identify and read the balances of the month prior to the month in process, and also uses the current period number to determine posted-before and posted-after-cutoff warning messages.
3. Fiscal Year	Specify the 4-digit fiscal year, based on the fiscal date associated with the row and the fiscal date pattern identified in the Business Intelligence constants. The system uses this year to identify and read the balances of the month prior to the month in process.
4. PAAG (adjustment percentage for the affected year) (Porcentaje de Ajuste Año Gravable)	Specify the rate or percentage that the system applies to the cost and depreciation amount to calculate the adjustment.
5. Document Type	Specify the document type code for the journal entry of depreciation inflation adjustment. Several prefixes are reserved for document types, such as vouchers, invoices, receipts, and timesheets. The reserved document type prefixes for codes are: P: Accounts payable documents. R: Accounts receivable documents. T: Time and Pay documents. I: Inventory documents. O: Purchase order documents. S: Sales order documents.
6. Date	Specify the general ledger date in which the journal entry will be generated. Enter the date with or without slashes (/) or dashes (-) as separators. If you leave the date blank, the system supplies the current date.
7. Ledger Type	Specify the UDC (09/LT) that identifies the type of ledger for the journal entry for depreciation inflation adjustment. Ledger types include AA (Actual Amounts), BA (Budget Amount), or AU (Actual Units).

Subledger

Use these processing options to specify the debit and credit subledgers to use.

1. Debit Subledger and Subledger Type

Specify the number of the subledger to use. Other options include:

Blank: The system creates the Journal Entry without the subledger.

AFE: Retrieve the subledger number from F1201.

Specify the UDC (00/ST) that identifies the subledger type and how the system performs subledger editing. On the User Defined Codes form, the second line of the description controls how the system performs editing. This is either hard-coded or user-defined. Values include:

A: Alphanumeric field, do not edit.

N: Numeric field, right justify and zero fill.

C: Alphanumeric field, right justify and blank fill.

2. Credit Subledger and Subledger Type

Specify the number of the subledger to use. Other options include:

Blank: The system creates the Journal Entry without the subledger.

AFE: Retrieve the subledger number from F1201.

A: Alphanumeric field, do not edit.

N: Numeric field, right justify and zero fill.

C: Alphanumeric field, right justify and blank fill.

No Batch Trans.

Use this processing option to specify the batch number of the transaction that the system will use when creating inbound transactions in the F0911Z1 table.

1. Enter the Batch number for Journal Entry generation

Specify the number that the transmitter assigns to the batch. During batch processing, the system assigns a new batch number to the JD Edwards transactions for each control (user) batch number it finds. Do not modify this value when the UBE is running.

Calculating the End of Useful Life for Colombian Assets

This section provides an overview of the Life End Date program (R76C1208), lists prerequisites, and discusses how to:

Calculate the end of useful life of assets.
Set processing options for Calculating the End of Useful Life (R76C1208).

Understanding the Life End Date (R76C1208) Program

Any asset generally has a limited life and, over a period of time, loses its value to a company. Depreciation charges are used to account for the loss in value and are spread over the useful life of the asset.

Run the Life End Date report (R76C1208) to validate the fixed assets that finished depreciating in the month that you specify (the net book value in the historical ledger is zero (0)) and that had any depreciation in that month (the balance in the depreciation expense account is not zero (0)).

When you run this report in proof mode, the system:

Validates the accounts where the system will post the End of Useful Life journal entries.
Prints the report showing the amounts to be posted in each Depreciation Inflation Adjustments account when executed in final mode.

This report also shows the calculated results.

When you run this report in final mode, the system:

Validates the accounts where the system will post the End of Useful Life journal entries.
Prints the report showing the amounts to be posted in the Depreciation inflation adjustments accounts, such as the monetary correction account.

If there is an error, the End of Useful Life process will not create the journal entry.
Creates a journal entry for depreciation inflation adjustment and depreciation monetary correction accounts to be considered for the calculation.

These journal entries have a document type as specified in the processing option for the Process tab. The batch type is G.
Creates records in the F0911Z table and automatically sends the transactions to the transaction file F0911.
Creates a journal entry that you need to post to the JD Edwards EnterpriseOne General Accounting and JD Edwards EnterpriseOne Fixed Assets systems.

After the you post the journal entry, the system displays on the Work with Cost Summary form the end of useful life value that is in the inflation adjustments ledger. You can verify how the system updated the depreciation method in the inflation adjustments ledger by reviewing the Depreciation Information form.

See Verifying Depreciation Information.

See Processing GL to Fixed Assets.

Run the report first in proof mode. Carefully review the report for accuracy and correct any errors.

Run the report in final mode to update the depreciation method to 00 and to validate the net book value for the inflation adjustments ledger. If the net book value for the inflation adjustments ledger is not zero (0), the system creates a journal entry that takes the depreciation inflation adjustments account (P76C1202) for the net book value of the inflation adjustments ledger to zero (0).

Prerequisites

Before you run the Life End Date program in final mode, run version ZJDE76C12 for the transaction file F0911 from the Journal Entry Batch Processor (R09110Z), with the processing option in final mode. You need to generate this version so that the system creates the inbound transactions and executes the call of process in batch mode, using the version ZJDE76C12.

See Processing GL to Fixed Assets.

Calculating the End of Useful Life

Select Fixed Assets (G76C16), Life End Date.

Data Selection for Life End Date

Enter the ledgers type and the accounts type (CHCD equals 1, 2) in the data selection.

Setting Processing Options for Life End Date (R76C1208)

Set these processing options to specify the mode in which you run the report, the period and fiscal year to use, and the document type and General Ledger date to use for the journal entry.

Process

1. Preliminary (' ') / Final (1)	Specify whether to run the report in preliminary/proof or end/final mode. Values are: Blank: Preliminary/proof mode. 1: End/final mode.
2. Period number	Specify the number that indicates the current accounting period. The system uses this period number to identify and read the balances of the month prior to the month in process, and also uses the current period number to determine posted-before and posted-after-cutoff warning messages.
3. Fiscal Year	Specify the 4-digit fiscal year, based on the fiscal date associated with the row and the fiscal date pattern identified in the Business Intelligence constants. The system uses this year to identify and read the balances of the month prior to the month in process.
4. G/L Date	Specify the GL date to use. Enter the date with or without slashes (/) or dashes (-) as separators. If you leave the date blank, the system supplies the current date.
5. Document Type	Specify the document type code that identifies the origin and purpose of the transaction. Several prefixes are reserved for document types, such as vouchers, invoices, receipts, and timesheets. The reserved document type prefixes for codes are: P: Accounts payable documents. R: Accounts receivable documents. T: Time and Pay documents. I: Inventory documents. O: Purchase order documents. S: Sales order documents.

No Batch Trans

1. Enter the Batch Number for Journal Entry generation

Ledger

1. Historical Ledger	Specify the historical ledger that the system uses. This ledger type must be created in the UDC 09/LT. The system uses this information to validate that the net Value in Books from the Historical Ledger equals zero, and that it has depreciation expense in the month to determine the fixed assets that ended useful life in that month.
2. Inflation Adjustment Ledger	Specify the ledger that the system modifies when creating the journal voucher. This ledger type must be created in the UDC 09/LT. The system uses this information to validate that the net Value in Books from the Inflation Adjustments ledger is not zero, and then it creates a voucher in this ledger by using the depreciation inflation adjustment accounts (P76C1202).

Working With Cost Inflation Adjustments in Colombia

This section provides an overview of cost inflation adjustments, lists prerequisites, and discusses how to:

Review and revise cost accounts.
Calculate cost inflation adjustments.
Set processing options for Adjustment by Inflation to Cost / Deferred Charge (R76C1201).

Understanding Cost Inflation Adjustments

For accurate financial reporting and income tax, Colombian companies adjust the cost amounts of their assets for inflation. These adjustments are recorded in fixed asset inflation adjustment accounts according to the government’s requirements. The asset’s adjusted cost, along with the depreciation inflation adjustment, is used to calculate depreciation.

Note. To adjust current period cost adjustment amounts for inflation, make the cost adjustments before you perform inflation adjustment for the current period. Otherwise, make the cost adjustments after you perform inflation adjustment for the current period.

You set up cost inflation adjustments accounts by company, entering the information by each company and cost account and specifying the related credit (monetary correction) and debit accounts that the system uses to generate the inflation adjustment journal entry. If you use only one ledger, the debit account is the cost inflation adjustment account. If you use two ledgers (subledger for inflation adjustments), the debit account is the same as the cost account. In either case, the credit account is the monetary correction account.

Calculating Cost Inflation Adjustments

Run the Adjustment by Inflation to Cost / Deferred Charge report (R76C1201) to calculate the cost inflation adjustments for the organization.

The report lists detailed and summary information for each asset, including:

Adjustment percentage for the affected year. (Porcentaje de Ajuste Año Gravable [PAAG])
Period.
Values.
Monthly inflation adjustment calculation.

When you run this report in proof mode, the system:

Validates the accounts to which the system posts the cost inflation adjustment journal entries.
Prints a report that shows the amount that will post to each cost inflation adjustment account when you run the program in final mode.

This report also shows calculated results.

When you run this report in final mode, the system:

Validates the accounts to which the system posts the cost inflation adjustment journal entries.
Prints a report that shows the amount that posted to each cost inflation adjustment account, such as the monetary correction amount.

If any errors occur, the cost inflation adjustment process will not generate the journal entry.
Creates the cost inflation adjustment journal entry and monetary correction accounts that are applied in this calculation.

A processing option specifies the document type for these journal entries. The batch type is G.
Creates records in the Entry Transactions file F0911Z and automatically sends the transactions to the transaction file F0911.
Creates a journal entry that you need to post to the JD Edwards EnterpriseOne General Accounting and JD Edwards EnterpriseOne Fixed Assets systems.

After you post the journal entry, the system displays the month inflation adjustment value on the Work with Cost Summary form.

Data Selection for the Adjustment by Cost / Deferred Charge Report

In the data selection, enter the ledger or ledgers in which you are working, and enter the account type. For example, if you enter account type 1 (cost), the system reads the table F1202 records that are related to the cost account.

Prerequisites

Before you calculate the cost inflation adjustments:

Set up cost accounts by company for cost inflation adjustments.

See Setting Up Cost Accounts for Depreciation and Inflation Adjustments for Colombia.
Generate version ZJDE76C12 for the transaction file F0911 from the Journal Entry Batch Processor (R09110Z), with the processing option in final mode, before you run the Adjustment by Inflation to Cost / Deferred Charge program in final mode.

Generate this version so that when the system calculates the cost inflation adjustment, it creates the inbound transactions and runs the process in batch mode, using the version ZJDE76C12.

Forms Used to Review and Revise Cost Accounts

Form Name	FormID	Navigation	Usage
Work With Adjustment by Inflation to Cost / Deferred Charges	W76C1201A	Fixed Assets (G76C16), Adjustment by Inflation to Cost / Deferred Charge (P76C1201)	Review and select cost accounts.
Adjustment by Inflation to Cost / Deferred Charges Revision	W76C1201B	Select an account to revise in the detail area, then click Select on the Work With Adjustment by Inflation to Cost / Deferred Charges form.	Revise existing cost accounts.

Reviewing and Revising Cost Accounts

Access the Adjustment by Inflation to Cost / Deferred Charges Revision form.

Calculating the Cost Inflation Adjustments

Select Fixed Assets (G76C16), Adjustment by Inflation to Cost / Deferred Charge (R76C1201).

Setting Processing Options for Adjustment by Inflation to Cost / Deferred Charge (R76C1201)

Set these processing options to specify the mode in which you run the report, the default values and subledgers to use, and the batch number of the transaction.

Process

1. Preliminary (' ') / End (1)	Enter 1 to run the report in final mode. Leave this processing option blank to run the report in proof mode.
2. Period No Ap	Specify the current accounting period. The system uses this period number to determine posted-before and posted-after-cutoff warning messages.
3. Fiscal Year	Specify the 4-digit fiscal year for which you run the report.
4. PAAG (adjustment percentage for the affected year) (Porcentaje de Ajuste Año Gravable)	Specify the rate or percentage that the system applies for inflation adjustment for the month.
5. Document Type	Enter a value that exists in the Document Type (00/DT) UDC table that defines the transaction type.
6. Date	Specify the general ledger date for the journal entry.
7. Subledger Type	Enter a value that exists in the Subledger Type (09/LT) UDC table that identifies the type of ledger for the journal entry for cost inflation adjustment.

Subledger

1. Debit Subledger and Subledger Type	Specify the number of the subledger to use.
2. Credit Subledger and Subledger Type	Specify the number of the subledger to use.

No Batch Trans.

1. Batch Number

Specify the number that the transmitter assigns to the batch. During batch processing, the system assigns a new batch number to the transactions for each control (user) batch number it finds.

Important! Do not modify this value when the report is running