Asset Types

Before you create an asset record, you must create asset types. Each asset must be assigned an asset type, which defaults some of the asset variables (on creation of new assets) and groups assets in reports and during processing.

To create an asset type:

Go to Fixed Assets > Setup > Asset Types > New.
Provide values for the following fields:
- Name – Enter a name for the asset type. For example, Furniture & Fixtures.
- Description – Enter a general description for the asset type.
- Accounting Method – Select the default depreciation method (formula) to use when creating assets of this type. This method will be used to calculate the values that will be entered into the accounting system.
- Residual Percentage – Enter the percentage value of the original cost which the asset will be worth at the end of its lifetime. For example, an asset purchased for $1,000.00 may be worth $100.00 at the end of its lifetime, so the residual value percentage would be 10% (10% of $1,000.00 is $100.00). Entering a residual value will always override the default value calculated using the percentage.
- Asset Lifetime – Enter the expected lifetime of the asset, in multiples of the depreciation period.
- Operating Lease – Check this box to indicate that the asset type will be used for assets that are generated from an operating lease. Clear this box if you are setting up an asset type for a finance lease.
  Note:
  - When you set the asset type to operating lease, you can no longer change it back to a normal asset type. Other Methods will also be tagged as Operating Lease.
  - Setting the asset type to Operating Lease will auto-compute the Residual Value Percentage.
Enter values in the fields on each of the subtabs:
Click Save.

After saving the record, the Lifetimes subtab becomes available.
Enter values in the Lifetimes Subtab.
Click Save.

General Subtab

On the General subtab, provide values for the following fields:

Depreciation Active – Select from the following options:
- True — Select True to make this asset type active and to include it in depreciation processing.
- False — Select False if you do not want to include this asset type in depreciation processing.
- On Project Completion — For assets related to a project, this option sets the assets to start depreciation when the project is completed.
  
  Note:
  The Depreciation Start Date and the Acquisition History record will be available, only when the project is closed.
Include in Reports – Check this box to include the asset type in the Asset Summary Report. By default, all assets are included in the report.
Revision Rules – Controls how revisions (revaluation) affect the asset. Select from the following options:
- Current Period — The depreciation of the asset to date is recalculated using the revised values, and the difference between the calculated depreciation and the previously posted depreciation is entered in the current period.
- Remaining Life — The revision only applies to the asset from this point forward, so it only affects future depreciation calculations.
Depreciation Rules – Select from the following options:
- Acquisition – Asset is depreciated in the same period when it is first made active.
- Disposal – Asset is depreciated in the final period of its lifetime.
- Pro-rata – Asset will depreciate in proportion to a partial month in both the period of acquisition and of disposal, based on a standardized 30-day month.
  
  For example, if depreciation starts on June 18, 2011 and ends on September 17, 2011, then 13 days worth of depreciation is recorded in the first depreciation period, and 17 days worth of depreciation is recorded in the final depreciation period.
  
  The following examples illustrate depreciation computation by Pro-rata when depreciation starts on the last day of the month:
  - If depreciation starts on the last day of a 30–day month (for example, April 30) or of a 31–day month (for example, January 31), depreciation is recorded for 1 day in the acquisition period, and for 29 days in the disposal period.
  - If depreciation starts on the last day of February, depreciation in the acquisition period is calculated for 1 day plus the number of days to complete 30 days. The asset depreciates for the corresponding partial month in the disposal period. For example, if depreciation starts on February 28, three days (the 28th plus 2 days to make 30) worth of depreciation is recorded for the first depreciation period, and 27 days worth of depreciation is recorded in the final depreciation period.
- Mid-month – If the Depreciation Start Date falls within the first half of the month (for example, July 11, 2011), then depreciation starts on the same month of the asset acquisition (July). If the Depreciation Start Date falls within the second half of the month (for example, June 18, 2011), then depreciation starts on the month after the month of asset acquisition (July).
Depreciation Period – Select whether the asset will be depreciated monthly or annually.
Custodian – Select the default employee responsible for assets of this type.
Supplier – Enter the vendor that assets of this type are purchased from.
Disposal Item – Select a non inventory item (for sale), to be used on the generated sales invoice, when the asset is disposed of (sold).

Accounts Subtab

Note:

Account values must be populated if the tax method is associated to an accounting book. For more information, see Linking Accounting Books to an Asset.

On the Accounts subtab, select accounts to post to for this asset type:

Asset Account – Select the main asset cost account (balance sheet). When proposing new assets, this is the account that will be searched for new transactions.
Depreciation Account – Select the account that will be tracking the accumulated depreciation (balance sheet).
Depreciation Charge Account – Select the expense account for the depreciation charges (period depreciation amount).
Write Off Account – Select the account for the asset write-off expense.

Note:
This account cannot be the same as the Inventory Asset account selected for an item.
Write Down Account – Select the account for the asset write-down expense.
Disposal Cost Account – Select the account for the asset disposal (sale) expenses.

The following account fields are available only if your account subsidiary is set to France.

Appropriations to Derogation Provisions Account – Select the expense account that will be used to record derogatory depreciation. This account will be used if the tax method amount is higher than the accounting method amount.
Derogation Provisions Written Back Account – Select the income account that will be used to record derogatory depreciation. This account will be used if the tax method amount is lower than the accounting method amount.
Derogation Provisions Account – Select the account that will be used to track the accumulated depreciation.

Maintenance Subtab

On the Maintenance subtab, provide maintenance information for this asset type:

Inspection – Check this box if inspections are required for assets assigned to this asset type.
Inspection Period – If assets assigned to this asset type require inspection, enter the inspection interval of the asset in months.
Warranty – Check this box if assets assigned to this asset type are covered by a warranty agreement.
Warranty Period – If assets assigned to this asset type are under warranty, enter the warranty period for the assets in months.

Other Methods Subtab

Note:

The Other Methods subtab will be available on the Asset Type record when the asset type has been created.

On the Other Methods subtab, default alternate depreciation (for analysis only) can be assigned to the asset, with different asset lifetimes and residual values. This enables tax reporting or corporate reporting methods to be tracked on the asset. These values are calculated automatically during asset depreciation but do not generate financial transactions.

To add an alternate depreciation method to an asset type:

Go to Fixed Assets > Setup > Asset Type.
Click the View or Edit link of the asset type.
On the Other Methods subtab, click New FAM Default Alt Depreciation.
On the FAM Default Alt Depreciation page, select an Accounting Book and Alternate Method. The available methods for selection include only those that you have set up in Fixed Assets > Setup > Alternate Methods.

When you select an Alternate Method, the other fields are automatically populated:
- Depreciation Method – Sourced from Alternate Method record.
- Convention – Sourced from Alternate Method record.
  
  Averaging conventions determine the treatment of depreciation during the first year of an asset's depreciation. Conventions are supported for alternate methods only, and the default value is None. If the depreciation period is monthly, the supported convention is Mid-Month. If the depreciation period is annually, the supported conventions are Half Year and Mid-Quarter. If the convention is set to Mid-Quarter, the asset will start depreciating for half of the first quarter, regardless of when in that period the asset came into service.
  
  Note:
  If the Convention value is set to None, depreciation processing will follow the depreciation rule selected in the parent asset record. For details on the depreciation rules, see General Subtab.
- Asset Life – Sourced from Alternate Method record.
- Financial Year Start – Sourced from Alternate Method record.
- Period Convention – Sourced from Alternate Method record.
- Depreciation Period – Sourced from Depreciation Method record.
- Subsidiary – Sourced from the Alternate Method record.
- Residual Percentage – Must be entered in the Other Methods of the Asset Type.
Click Save.

Lifetimes Subtab

On the Lifetimes subtab, click New FAM Lifetimes to enter location-specific defaults for the asset type. This will default the Asset Lifetimes for the main (accounting) method based on the location of the asset.