Understanding Adjusting, Transferring, Reversing, and Evaluating Assets
Periodically, it is necessary to make changes to asset records to correct errors or add newly received information. You can modify any information that has been entered about assets, including cost, market value, quantity, depreciation rules, location, physical attributes, and so on.
Sometimes adjustment and transfer changes have a financial or tax impact. Changes to physical information about an asset, such as its weight, do not affect cost or depreciation. However, changing quantity, cost, depreciation attributes, or department affect your financial and tax books.
In compliance with accounting standards, many companies must carry assets at fair value. As a result, frequent revaluation of assets may be necessary, depending on requirements. PeopleSoft Asset Management provides a revaluation worksheet to facilitate potentially frequent revaluation of one or multiple assets using the Cost Based or Depreciation Write-off methods of revaluation. Additionally, you have the option of using the Revaluation in Mass process where the Net Method of revaluation is available, as well as the other two methods. These tools provide the capability to properly deal with the depreciation distribution between original cost and revalued basis
You must also be able to undertake an effective impairment test cycle for assets on at least an annual cycle at the balance sheet date depending on business industry and location. PeopleSoft Asset Management provides an impairment evaluation process that allows you to assess potential impairment of user-defined asset selections. The impairment worksheet enables you to enter recoverable amounts and automatically calculates potential impairment losses. Subsequent to this review, the impairment worksheet generates the associated accounting entries to enable you to recognize these adjustments in your accounting system. This process eliminates manual steps and minimizes accounting errors.
PeopleSoft supports the ability to maintain asset histories. Information on a per-asset basis is available within each record. Cost summary reporting and asset component hierarchy history reporting are both also available.
When necessary, you can also reverse erroneous asset transactions using the Transaction Reversal feature. The Transaction Reversal feature automatically reverses the transaction last performed on the asset and provides a clear audit trail of each reversal.