During this recorded webinar, we share the monthly Fixed Assets process in Dynamics GP and explain how the Fixed Assets affect the General Ledger.
Topics discussed during this session include:
- Asset classification and tracking
- Types of Amortization
- Integration to Accounts Payable (AP)/Purchase Order Processing (POP)
- Entries recorded in the General Ledger (GL)
- Reporting using SSRS
The intended audience for this video is existing Dynamics GP users on all product versions.
Contact us if you have any questions about finding fields in Dynamics GP.
Tess: Hello, everyone, and thank you for joining us today for our Dynamics GP Coffee Break Fixed Assets. My name is Tess and I’m the facilitator today. If you have any questions during the presentation, please type them into the questions area in the control panel on the right-hand side of your screen, and I’ll answer questions at the end. The session will be recorded and posted on our blog, as well as shared with you later this week. Now, I would like to introduce our presenter, Don McNulty, who is a Solutions Architect on our Dynamics GP team at Encore. Don, I’ll pass it over to you.
Don: Thanks, Tess. So good morning everyone. So today we’re gonna talk about fixed assets. So, the agenda is basically pretty straightforward. It’s, how do we classify and track the asset in GP, and what types of amortization can we use? Introduction to AP/POP, so is, how do you link your accounts payable side when you’re purchasing your asset into your actual asset? And then, of course, what entries are recorded in the general ledger? It’s a fairly straightforward product. It’s attached.
So what we’ve got is, underneath the asset cards, we have classification and tracking. We have an asset type, we have a location, we have a sub-location, we have a custodian. We have a lot of information on each and every one of the items attached to them as we put through the classes and things like that, that drives general ledger accounts, where we need six or eight different GL codes and I’ll be showing those later on. Also attached to each asset, we have a book card. That book card does things like set the depreciation or amortization type, the in-service date, the life of the asset, the net book value, salvage values, and other things like ITCs and some other issues that can be done. We can also add additional information in there based on what’s required for you to track this. This is the screen that we’ll talk about in a little more detail later on, but it is the one that drives the depreciation and drives the general ledger entries. Then we’ll talk a little bit about the reporting. SSRS has a very good built-in continuity report for fixed assets. There’s also fixed asset reports inside the GP as well. You can get your net book values and things like that out, so if you’ve got something to balance too on your asset cards. Integration.
So, on the integration side, we have two integrations that can occur, and I’ll show both of those today. One comes from accounts payable to create vouchers to put the voucher in, we put it through a clearing account, and what that clearing account does is that allows you to drive your asset into a place where you can then take the time to take that out of the voucher and put it into an asset. One of the challenges that people face is that, if I don’t buy five computers, I’m gonna get one invoice for those five computers. I’m gonna list them as five separate assets, but I’m only gonna have one invoice. So you need to be able to attach that same invoice to multiple assets.
Integration to POP. You can also use purchase order processing. There’s a flag that drives it on the item card, or on the item detail on the purchase order, and you can then flag that to go through to the fixed asset. You change the GL code to the fixed asset clearing account, you select it as a capital item, and then that item will then show up on the list and you can then attach a single line from a purchase order to an asset. So if I’m buying a computer, or a computer and a monitor and a docking station, those three items would then show us three separate line items on my purchase order and I’d have three separate lines in my fixed asset clearing so that I would be able to attach each of the individual lines to the actual asset. This makes tracking back and finding the actual invoice for the auditors much, much easier to do.
So, I’m gonna show you some of the journal entries that come out of this. So, basically what it does is it does three separate journal entries. One entry is for the purchase of the asset. So, when we purchase it with AP, we’re basically debiting fixed asset clearing and we’re starting to do the accounts payable. That’s done in the accounts payable, but then when we POP into fixed assets, when we move it from…when we register the asset of an asset, it will then debit fixed asset. It will credit fixed asset clearing and it will debit the fixed asset control account. Furniture, fixture and equipment, computer equipment, cars, whatever it happens to be, automotive, whatever. Then, second thing that it does is that on a monthly basis, it will calculate the depreciation that’s required to bring the depreciation of the asset up to the current information. So that gets done on a monthly basis, so you’ve got a monthly depreciation. That monthly depreciation can be done by period, i.e. by month, or by day. By day would allow you to then use 28 days in February, would get you less depreciation than 31 days in March.
The last thing that it does is disposal. So, when an asset is disposed of, this is not when it’s… When it’s fully depreciated, it stops depreciation and the accumulated is equal to the…accumulated amortization is equal to the asset value. But when I sell the product, or dispose of it because it got lost or stolen or whatever it is, I need to get rid of that particular asset. When I get rid of that asset off my list, it will reverse out the cost, reverse out the accumulated depreciation, take whatever cash value you got for it, if you sold it, or zero if the case being you threw it out, it would then recognize a gain and loss on foreign exchange…oh, gain and loss on the fixed assets.
So, without saying more, what I’m gonna do is I’m gonna pop over and show you what this looks like inside GP. So, inside Great Plains, underneath your financial area, you have a large number of things…it shows underneath your financial fixed assets, we have them under inquiries and we have a few transactions as well as setups. So, when we look at a general asset inside here, we can create a new asset inside here and we can push through. As we push them through, we can then attach the acquisition cost and things like that and create the asset. So, when I bring up my asset…let me just bring it up. So, it’s a desk. This one here I have attached to this particular one here. This was an asset that came through here. If I click on this voucher receipt, it will actually drill down and show me that it came on a shipment invoice from Advanced Office. So, this is who bought it. I got one shipped. I did create a purchase order for two desks. So if I go to my line item number here, it’s a capital item. So, it’s ready, it comes in through here. So that’s how we attached it through here. So, inside here I keep track of a physical location, and in their particular case, they have a physical location of boardroom 2, room 100 in Atlanta. It’s filled in Atlanta as well, which is a physical location. There’s a physical location inside the building, plus where the physical is. The structure, whether what structure you wish to have, you can put this to admin or accounting, that’s the department. And I can also attach it if I wanted to, to any one of my employees in my employee cards so that I could say, “Oh, this is a cell phone. I’ve given it to Joe,” and at the end of the day you could say, “Okay, what does Joe have?”
And you can get a report that shows that particular information. Under the manufacturer, you can put in a manufacturer. I’m putting office.com. You can put in a serial number. My desk does not have a serial number, but it could have a model. It could have executive desk, like so, and it might have a warranty of 2028. Sorry, 12/31/2028. I’m running in 2027, so this would be good for year and a half, and we can go, okay, and that would then allow me to push a report on the warranties. So that’s basically what it looks like from there. When I go to my booking side here, I can then bring up my book account. This asks…this is the same information. This is the depreciation page. What book do I want? I can have as many as I want. I can have a minimum tax. I can have a federal versus provincial, or a federal versus state. I can also have an internal. Now, I’ve used the internal one. The internal one is the one that actually books against the general ledger. Only one book can book against your general ledger. So we place it in service as of today. It’s been depreciated up to and including the end of last month, so we all have everything there. I’ve put a salvage value of $400 on a $1,000 vest, and it’s good for five years. You notice that I’ve put in my original life for five years. When I do that, that means I have $600, so I would expect $600, $10 a month totaling to $6,000. When I click on my arrow key beside my EA depreciation, I can see my periodic depreciation rate is $10 a month, and my daily depreciation is 32.73 cents per day.
So I could do it by day or by month. So, okay. If I make any changes to any of these things, it will ask me to recalculate and go from there. The depreciation methods are listed here. We have straight line, original life, remaining life. We can change things like that to fit the…so no depreciation declining balance. If we use a declining balance, we have to fill in the percentage side over here, and that would then be the 20% decline in balance or 30% decline in balance to match the CCA, say in Canada or the U.S. if there’s been any depreciable assets. Down here, you can mark it, whether it’s a luxury automobile. These two, luxury van and tax, and things like that, and the ITC costs are American-based, not Canadian, but they do work very well from that point of view. So, that’s your book value and it gives you the information that you need from underneath your book.
Other screens you’ve got. You have an insurance screen, and this allows me to insure this particular piece, I can say 2027, it’s insured. What’s my insurance value? I’m gonna insure it for $1,500 because I think I’ve got a good deal on it. The replacement cost is $1,500, and then reproduction and things like that. So I can add this information. I can then run reports that will then give me an insurance value report for my fixed assets that I have on my books. This is good so that we can keep track of what we should be putting on our insurance pieces, especially for older assets that may have appreciated significantly in value and you need to insure more than what they actually are. Other things that we can do inside here, if there was a lease, and then there’s some user data. Now, I’ve got a number of user fields here. I can rename all of these if I wish. I am not going to if I have this inside my setup, but I could have done so. So once I’ve got that, my asset is now in place. Okay? So, okay, so we’ll close this. We’ll close this.
So, what I’m gonna do now is I’m gonna quickly go into my purchase order inside here, and I have a PO outstanding on it, so I don’t have to key this in. There’s my two desks, and now I go to my item. So, inside here, I’m gonna look at this, and then I’ll take a quick look up of the accountants to make sure that they’re current. Here it is. And you’ll notice that there’s a capital item button here. And I’ve got this turned on for receipts, this is going to go to the capital item, so that’s fine. Everything else is fine and I hit save.
And then what I’m going to do here is I’m gonna go actions and I’m gonna receive the PO. Seems like the reasonable thing to do. I’m gonna receive the one, I’ve already received one, as you saw, I just had it in there. There’s my desk. I’m gonna receive one, and I’m going to go receive. So there it is there, it’s ready to go. When I look at my distributions, you’ll see that it is putting the accrual to 2111, and it’s putting the $1,590 into fixed asset plan, so I’m going with it. So I’m good with this. I can hit post. I’m gonna close that, and then I’m gonna close this.
And the other thing I’m gonna do is, I’m also gonna put in a voucher so that we can see the other types, the accounts payable integration as well. And we’ll go to advanced as well. Document number. And we’re gonna put in $2,000 for this one. Then under my distributions, I’ll go into here and I’m gonna change this back. That’s all. So there it is there, and then on my distribution side inside here I can say, “Stand-up desk,” and go, okay. Yeah. Then we’ll just put it in there so we know what it is, and we go post. And again, I’ll just close that. This is just standard accounts payable transactions that we’ve done. We’ve put them through to fixed asset code.
So now, when I go into my financial inside here and I go back to my cards, which we just discussed, and I go into general, you’ll see that I have a new button at the top called purchases. So, inside here, I can grab either of these. I can grab the 1,000, automatically brings in the office desk for this. I’m gonna put it in a class. I’m gonna put it into furniture, fixture and equipment, and I’m gonna give it a six. You can have an auto number if you wish. And then from here, I can pop down to my physical location. I’m gonna put this in voiding number two. It automatically fills in the ledger for me, and underneath my structure, I’m gonna give this to sales instead of to accounting, and I’m not gonna assign it. In here, this is office.com. Again, quantity one, last maintenance, and now I’m going to go into my book account. So there it is there, and then you go to fix. Oops, my apologies, I forgot to save it on this. There it is there. I’m gonna put it into internal and it automatically fills in seven years because that’s what was on the class. I can change that easily to 05, for 5 years. I can also put in dates if I need to. I’m gonna put in no salvage value, and like so. Let me just leave it like this, then we’ll hit save. And, yes, I know I changed the depreciation, reset to lifetime. There it’s $150, and when I go like this, it’s $16.66 a month because it has no salvage value. So there it is, there at 54 cents a day. So that’s what you need, and you hit save, and now we’ve set up that asset.
Now, when I go back to my purchases, I hit save, and then I go clear. When I pick up my purchases here, I can see the $2,000 asset and I would go through it. I would empty out the fixed asset clearing account. I’m gonna leave this one for the time being, and we’ll close this. So, then what would happen is just that we’ve come to the end of the month, and you need to get that posting across. We’re not gonna do a depreciation at this time, we’re gonna go period from 2027/004 to 2027/004. We go insert, and let me just grab my own…I’m just gonna grab the single asset. So I’m just gonna pick those. We hit process. There it is. There you’ll see that it’s taking the money out, putting it in there, and then you go post. Then I’ll put it to the screen so you can take a look. And there it is and it’s now been moved into furniture, fixture and equipment. So I’ve got that done. And if I was to go into my general ledger here, not this point here. There it is there. So I’ve got my 1,500 coming to 1,590. And if I look at my receiving document, you’ll see that I’ve got the 1,590 for the credit and the debit, so that’s offset to 00. So if I posted both of these, the 1,590 would be 0.
So then what happens is I come into here and I wanna depreciate a single asset. And you, of course, would do them all at once. We put the internal depreciation target date is going to be 04/30/2027. So I’m gonna depreciate one month, and I’m gonna hit depreciate, and it’s done. So now, when I go back to my GL posting, again, I’ll pick the asset. Otherwise, it kicks everything. The process, there we are there. There’s my $16.67 that depreciates the asset. So then I can post this, and again I can put it to the screen, go, okay. Close that, and there’s my 16.67 for my depreciation. Step two.
Third step would be, I would go into my fixed assets underneath my transactions and I would dispose of an asset. I could then retire an asset, and when I retire the asset, 26, retirement date 05/31/27, I’ll put it to the next month. Retirement type is sale. Retirement code is full. And, so now, what we wanna do, since we go cost, cash, proceeds, cash proceeds I got $400. No expenses for the sale and we go retire. And when I retire it, I can then go back to my general ledger, make sure I changed the period because I’ve depreciated it. You go insert, and again I’m gonna pick up my asset. So, it would then generate the information. It seems to have managed to foul up on me, one second. I’m gonna just go and delete.
So, when we do these fixed assets and things like that, what we have is we have a group of accounts, and the accounts themselves are set at the account group. And my account group is furniture, fixture and equipment, so there it is then. So there’s the depreciation expense and the depreciation reserve, you accumulated amortizations. Prior year, if you make a change to the asset on the value, you can make it a prior period adjustment for you if you wish. It’ll push it through to here. The asset cost itself goes to 1,500, proceed cash to $400, would’ve gone to 1,190, and then recognize payment loss on fixed assets would be gone to 30. And then, of course, the clearing account.
Now, reporting-wise, we have a large number of reports inside here. We can click on fixed assets, activity comparison depreciation. So, inside here you can see the depreciation and things like that. So, you can project depreciation. Now, one of the things that I will quickly show is, when I go to my routines and I give a projection, I’m gonna project all assets go like this and go…yeah. Our target date, 2027/12/31. Oops, 12/31/2027. Rejection. Yeah. Runs through all my assets, and it does a projection into the future. And close this, and then I move on to my reports and I can hit projection, and I can take…I’ll take a period projection in detail. We’ll modify this and make sure I’ve got this correct. I’ve got everything in here, from March through to here. And we go destination, it’s not…it goes to there and we go print.
So, there’s your office desk number one. These are what is going to be done each period. And if I go to the very bottom, I have number 25, projection grand total is $90, which is the 10 times 9. There’s only 1 per month, there’s only 9 months, so therefore it’s only gonna be $90. And as I move up through here, it has 1,190 in. You’ll notice that the last one of the period gives you the rounding so that it rounds it properly to exactly the amount. So, if there’s any rounding issues, it shows up in the December…or in the final period of your year. Okay? Other things that we have is, we have under reporting services, we have a continuity report, which I mentioned before, which is very nice. We do things like that. But, Tess, how am I doing for time?
Tess: Good, Don. We do have a few questions that have come in if you are ready for that before we go back to the slides.
Don: Let me go back to the slide here.
Tess: Might wanna stay in GP.
Don: I’ll just stay in GP. Okay.
Tess: Yeah. So the first question is, is there only one fixed asset clearing account?
Don: No. The fixed asset clearing account is set by the class, so you can have different ones. So as you put in your account groups, you set your fixed asset clearing. So my computer fixed asset clearing, now in my particular case they’re all set to 1590, but you could set a different one for each account group. So you could have one for computer equipment, you could have one for desks and office equipment, you could have one for automobiles, for instance.
Tess: Sounds good, thank you. The next question is, if you use a different GL account for work and process over a couple of years, how do you eventually move, capitalize that cost into separate fixed assets?
Don: If you do a project, so for instance, you’re building a server room or you’re renovating the floor of a hotel, and you’ve got, you know, large numbers of invoices and things like that coming in, what most people do is they push them through to a WIP account, like you said, like a work-in-progress. And once the asset is completed, you then move those assets in and you do a journal entry to remove the amount from the WIP account and put it into the fixed asset clearing account as a single entry, or in as many entries as you require for the assets.
So, if I’m building a server room, I may say, “Okay, I’ve got, you know, I’m gonna list all 15 computers separately, but the racks and the wiring and all of that might be 30 invoices, but I’m gonna put them in as a single asset, as a leasehold.” So it might be because they’re in the wall. So you put in wiring, so you put them in the wall. So that would then become a single asset. It’s a matter of how many assets you wish to do. And on a server, am I keeping track for IFRS purposes? Am I keeping track of hard drives versus motherboards? Because motherboards last longer than hard drives, they have a different depreciation rate potential. So, these are questions that you would have to answer yourself. When you do that, you do however lose the ability to put the voucher directly on the assets. When I look at the asset on the acquisition cost, it is no longer there. So if I go into my general view and I bring up this, when I go to acquisition cost here, I would not be able to…I can type anything that I wish inside here. I could add an additional line inside here and I can say, “Chair pads,” and I can add additional pieces of information inside here from the acquisition. I could add additional costs inside here as well if I wish.
Inside here, I could attach a different vendor manually so I can know who’s traveled. And then I can’t link a receipt because I don’t have one, but I can also put in a currency and then I can put in a document number and things like that. So I can put in a document number inside here. So, you know, one, two, three, four, five, six. And if I’ve got a PO number, I can put a PO number in there. So, I can key this manually and you could fill in a bunch of things from your WIP, if you wish. That would be up to you as to whether you wanted it in fixed assets or you would just leave it in the WIP and have the people go back to the WIP again. Okay. Thanks, Tess. Anything else?
Tess: Thanks, Don. One more, yep. At the top of the asset card window there’s a purchases field drop-down. Do the contents of this drop-down tie in with the asset clearing account?
Don: Yes, they do. This list here is the same as this list here. It just gives you more information so you can see them and you can select multiple ones if necessary. So it might be that you’ve got…I bought a workstation for a computer, so I’ve got three separate invoices. I bought the monitor at Best Buy. I bought the computer from HP Direct, and I bought the docking station at Future Shop. So, all three of those would be three separate invoices to three separate vendors. I may split them all together and call it a workstation as a single asset. So, I would want the ability to come up to my purchase here and select multiple invoices. That would then, inside my acquisition here, would then add all three as one and then give me a total acquisition cost of the three combined together. Okay.
Tess: Thanks, Don.
Don: All right.
Tess: Do you wanna go back to the slides?
Don: Let me pop back. Let me…
Tess: So, as Don is navigating back to the slides, we do have two upcoming coffee breaks in January and February. So, I put the Encore Events page link into the chat area if you’d like to register for either of those.
Don: And we’ve got one on general ledger close on January 24th, and we have one on how to do a bank rec on February 14th.
Tess: That’s great. And thank you, everyone, for joining us today, and thank you, Don, for sharing that information today. Have a great rest of your day.
Don: Thanks, all.
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9:00 am – 9:25 am PST
Webinar - Maintenance of SOP Tables in GP
9:00 am – 9:25 am PST