2 Understanding Fixed Assets

This chapter contains the following topics:

Note:

Country-specific functionality for fixed assets exists for Chile, Colombia, Peru, and Russia.

2.1 Fixed Assets

Financials are the backbone of corporations, and play an integral role in all levels and aspects of business. Many businesses require an efficient method of managing their assets. The JD Edwards EnterpriseOne Fixed Assets system provides an effective way to track assets for financial and reporting needs.

This section provides overview information about the financials industry, as well as overview information about how the JD Edwards EnterpriseOne Fixed Assets system operates.

The JD Edwards EnterpriseOne Fixed Assets system is a flexible system that can assist you in managing information and costs that are related to your fixed assets. Many companies delay processing fixed asset information until they are ready to compute period depreciation. You can use JD Edwards EnterpriseOne Fixed Assets system integration and features, such as automated asset setup, to update asset information on a daily, monthly, quarterly, or annual basis, depending on the needs of the organization.

This section discusses:

  • Multiple depreciation books and methods.

  • User-defined depreciation.

  • Automated asset setup.

  • Asset location.

  • Insurance and financing information.

  • Asset transfers, splits, and disposals.

2.1.1 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 either a user-defined depreciation method or one of the provided predefined depreciation methods, in addition to null depreciation.

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

2.1.2 User-Defined Depreciation

Although the JD Edwards EnterpriseOne 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 that are specific to the company without using 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.

2.1.3 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 JD Edwards EnterpriseOne Fixed Assets system, the information that 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

2.1.4 Asset Location

You can locate assets based on any of this information:

  • Company

  • Equipment status

  • Description

  • Responsible business unit

  • Current location

  • Category codes

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

2.1.5 Insurance and Financing 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.

2.1.6 Asset Transfers, Splits, and Disposals

You can use the JD Edwards EnterpriseOne Fixed Assets system to record asset transfers, splits, and disposals in the accounting ledgers, as described in this table:

Asset transfers

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

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

Dispose of assets individually or in groups. The system automatically creates the journal entries for each asset disposal, based on your specifications.

2.2 Fixed Assets Process

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

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 GL 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 GL when you transfer assets in final mode.

Asset split

Create and post journal entries automatically through the split program to the GL and then to fixed assets.

Asset disposal

Dispose of assets in preliminary mode to review journal entries that will be posted to GL and fixed assets when you dispose of assets in final mode.

Annual assets balances 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.

2.3 Fixed Assets Primary Tables

The JD Edwards EnterpriseOne Fixed Assets system stores asset and transaction information in three primary tables:

Asset Master File (F1201)

Stores basic information about each asset, such as:

  • Asset number

  • Asset description

  • Account coding

  • Category codes

Asset Account Balances File (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 Asset Account Balances File table (F1202) and the Account Balances table (F0902).

2.4 Fixed Assets Secondary Tables

The JD Edwards EnterpriseOne Fixed Assets system also accesses these secondary tables:

  • Location Tracking Table (F1204).

  • Equipment Messages (F1205).

  • Units of Production Schedule Master File (F1208).

  • Location History Text (F1210).

  • Parent History (F1212).

  • Default Accounting Constants (F12002).

  • Default Depreciation Constants (F12003).

  • Depreciation Rules (F12851).

  • Annual Depreciation Rules (F12852).

  • Depreciation Formulas (F12853).

  • Depreciation Period Spread Rules (F12854).

  • User-Defined Codes (F0005).

  • Ledger Type Master File (F0025).

  • Address Book Master (F0101).

  • Account Master (F0901).

  • Automatic Accounting Instructions Master (F0012).

  • Business Unit Master (F0006).

  • Supplemental Data (F12090, F12092).

  • Specification Data (F1216).

  • Specification Cross Reference (F1215).

  • Status History File (F1307).