Overview
An asset is created, and its value is derived from cost objects that include all costs on asset acquisition or related services.
Fixed asset recognition is a highly regulated process that depends on certain accounting standards and local laws.
Basic criteria for classification of assets are as follows:
- If the value is < N, it is treated as an expense charged to profit and loss items.
- If the value is > N, it must be capitalized as a fixed asset and depreciated.
- If the value is unclear, it can be evaluated by an expert and then treated as a fixed asset or not.
As a relult of the proces, a new fixed asset is created in the system, and the initial value of the asset is derived from the asset under construction that includes acquiring costs or capital expenses.
Perform initial recognition of fixed assets flowchart
See how it works
Open the link in a new tab and use the Administrator EN username. No password is required.
Paths
| Path | Assets management → Fixed assets → Fixed assets — Initial recognition |
|---|---|
| In-app link EN code |
e1cib/command/Document.FixedAssetsInitialRecognition2_4.Command.FixedAssetsInitialRecognition
|
| In-app link RU code |
e1cib/command/Документ.ПринятиеКУчетуОС2_4.Команда.ПринятиеКУчетуОС
|
How to create initial recognition documents
1. Go to Assets management and then click Fixed assets — Initial recognition under Fixed assets.
2. Click Register and select Fixed assets — Initial recognition.
3. Fill the header and select the Fixed assets kind of expense capitalization dimension.
4. Click the Fixed assets tab.
5. Add a new line and select the asset.
How to fill in preliminary cost of assets
1. On the Fixed assets tab, click Fill and select Preliminary cost to fill the cost.
2. The system will automatically:
- Calculate the accumulated costs on the investment project as of the date of asset recognition in accounting.
- Fill this amount as cost in the financial accounting.
Note
Within the Month-end closing procedure, the system will perform the Fixed assets and intangible assets movement generation month-end job.
As a result, the system will recalculate the exact Initial cost of the asset and apply it in the financial accounting.
The Preliminary cost specified in the Fixed assets — Initial recognition document will not change.
Note
If the Preliminary cost of the asset (specified in the Fixed assets — Initial recognition document) exceeds the actual cost of the asset acquisition, the system will notify you about an error in the Fixed assets and intangible assets movement generation month-end job.
Click the Details hyperlink to drill down to the Fixed assets — Initial recognition document.
Click Fill and select Preliminary cost to refill the Preliminary cost.
Repeat the month-end closing stage.
How to enable asset depreciation
1. In the Fixed assets — Initial recognition document, click the Accounting parameters tab.
2. Select a depreciation method and specify a Useful life period.
Note
In some cases, you need to change the depreciation method or the useful life period.
To do this, see how to change asset accounting parameters.
3. Click the Expense parameters tab.
4. Specify an Expense item and an Expense dimension.
Note
This document allows you to specify a single cost center and expense item for depreciation charge.
To add more expense items, see how to change asset accounting parameters.
5. Post the document. The system will include the asset in the asset register and start depreciation from the date of the Fixed assets — Initial recognition document.