Dynamics NAV provides a fully integrated fixed asset management functionality that allows you to track depreciation expenses reliably in multiple depreciation books. It is useful to have one depreciation book integrated with the general ledger, and another one for internal fixes asset calculations that do not have to be reflected in the general ledger. You can also keep track of other information relevant to fixed assets, such as maintenance cost and schedules, acquisition costs, and related insurance information.
Each fixed asset has a card, which contains all the information about the asset. To create a new one, you can follow these steps:
- Navigate to Departments | Financial Management | Fixed Assets | Fixed Assets and click on the
Newicon from the ribbon bar. - A blank card opens. Press Enter to get a No. and give it a description. If the asset has a serial number, type it in the Serial No. field.
- On the Lines Fast tab, create one line with the following information:
|
Field |
Value |
|
Depreciation Book Code |
COMPANY |
|
FA Posting Group |
CAR |
|
Depreciation Method |
Straight-Line |
|
Depreciation Starting Date |
01/15/2016 |
|
No. of depreciation years |
5 |
So far the Fixed Asset Card looks similar to the following screenshot:
To post the acquisition cost of the asset through a purchase invoice, use the following steps:
- Create a new purchase invoice. Select the vendor, and select 1/15/2016 as Posting Date.
- Create a line in the purchase invoice with the following values:
Field
Value
Type
Fixed Asset
No.
FA000100
Quantity
1
Direct Unit Cost Excl. VAT
13500
- Post the purchase invoice.
- Go back to the fixed asset card and note that Book Value is now
13500. Refer to the following screenshot:
In some cases, a fixed asset already exists and its acquisition cost has already been posted using a purchase invoice. Later on you need to increase the cost of the asset, because the company has invested additional costs into it, or for any other reason. To do so, you can use the Fixed Assets G/L Journal using the following steps:
- Navigate to
Fixed Assets/Fixed Assets G/L Journals. Open the DEFAULT section by double-clicking on it. - Create a new line, similar to the one shown in the following screenshot. In this example, we are going to add
1000to the cost of the asset. This includes taxes, which means that, once posted, only 800 will be added to the asset cost. Take a look at the following screenshot:
- Post the journal lines, by selecting the Post option from the ribbon bar.
- Go back to the Fixed Asset Card and note that the Book Value is now
14300.
Fixed assets reduce their value over time. We need to account for this fact by calculating and posting the fixed asset depreciation. Follow these steps to do so:
- Run the Calculate Depreciation batch job by navigating to Departments Financial | Management | Fixed Assets | Periodic Activities.
- Select the options shown in the following screenshot:
This job will calculate the depreciation for all the assets. In the example, we have filtered the job to only calculate the amounts for the Fixed Asset No.:
FA000100. The system creates journal lines. You have to check and post them manually. - Navigate to Fixed Assets | Fixed Assets G/L Journals. Open the DEFAULT section by double-clicking on it. The program has created the following lines:
- Post the lines.
- Go back to the Fixed Asset Card and note that the Book Value is now
14173. - Double-click on the Book Value to see the FA Ledger Entries for the asset.
For the asset we have created in this chapter, we selected the Straight-Line depreciation method. Dynamics NAV allows us to select one of the following depreciation methods:
|
Method |
Definition |
|
Straight-Line |
The same amount is depreciated each year. |
|
Declining-Balance 1 |
The largest portion of the cost is allocated to the early years of its useful lifetime. If you depreciate monthly, the same amount is depreciated for all the months in one year. |
|
Declining-Balance 2 |
Similar to DB1, but if you depreciate monthly the depreciation amounts will decline for each period. |
|
DB1/SL |
DB1/SL stands for Declining-Balance 1 and Straight-Line. For each period, the greater of the two amounts is used to post the depreciation. |
|
DB2/SL |
It uses the same principle as DB1/SL, but the amounts are calculated according to the Declining-Balance 2 method. |
|
User-defined |
This allows you to define your own method. |
|
Manual |
You must enter the depreciation value manually. |
|
Half-Year Convention |
When Half-Year Convention is applied, a fixed asset will have six months' depreciation in the fiscal year. It can be used in conjunction with the Straight-Line, Declining-Balance 1, or DB1/SL methods. |
Disposing of or selling a fixed asset is the last step in the typical life cycle of an asset. When you do so, you must post the disposal value together with any related gain or loss.
To sell the asset using a sales invoice, just create the invoice and select the Fixed Asset in one of the lines of the invoice, just like we did when purchasing the asset. Enter the selling price and post the invoice. The program will do the rest.
You can also post disposals using the Fixed Assets G/L Journal.
A batch job called cancel FA entries is used to cancel an incorrectly posted FA entry for one or more fixed assets. This task creates the new FA journal lines. When you post them, the system creates entries to nullify the incorrect ones, both on the general ledger and the FA ledger.
The depreciation for the asset FA00090 switchboard has already been calculated until December 2013. You have just realized that in October you had to add the cost to the asset. Therefore you need to cancel the depreciation until October, add the cost to the asset, and calculate the depreciation again. Let's see how you can cancel the depreciation entries:
- Open the card of the asset
FA00090switchboard and click on the Ledger Entries option from the ribbon bar. The FA Ledger Entries page will open. - Select the entries you want to cancel. In the example, we are selecting the last three entries. That is the depreciation from October to December.
- Click on the Cancel Entries option found on the ribbon bar. Click on OK on the emerging page.
- Navigate to Fixed Assets | Fixed Assets G/L Journals. Open the DEFAULT section by double-clicking on it. The process has created journal lines that once posted will cancel the original depreciation entries.
- Select all the journal lines and click on the Insert FA Bal. Account option. New lines will be inserted into the journal to balance the transaction.
- Post the journal lines.
- Go back to the FA Ledger Entries page and note that depreciation entries corresponding to October to December are not there anymore.