Strategy for Asset Grouping

Before you set up group asset processing, consider how you want to group the assets. Asset grouping is not standardized; however, there are key components that apply almost universally. Assets can be grouped by FERC account or subaccount at the highest level. Vintage year and location are also commonly included in a grouping strategy.

Depreciation of group assets identified by the FERC code is usually calculated and booked to the general ledger at the FERC account level by using a group asset depreciation rate. Assets are summed by vintage year within the FERC account to provide statistics to support life studies and, subsequently, to derive the group rate for the FERC account and vintage year. Grouping by vintage year is also required to support reporting of deferred taxes. Regulatory agencies require reporting of assets by location or jurisdiction. Consequently, they require grouping by location.

Other factors that you should consider in determining how to group assets include depreciation policies, tax reporting requirements, jurisdictional reporting requirements, and corporate accounting procedures. Assets grouped together should have these attributes in common.

This diagram shows an asset grouping scheme:

Asset grouping scheme

Note:

All group asset processes are available for processing with multiple currency transactions enabled.