Asset
required
This is a unique code to identify the asset within the record system. This code can be either numeric, alphabetic or a combination of both.
Description
optional
This field contains the full description of the asset. The field is 35 positions wide. This description appears on the Fixed Asset reports.
Type
required
This field is used in creating reports. Assets are listed by type. Particular assets can be selected to be displayed on a report by selecting a range of types. When you run certain reports you are asked for a range of asset types. A type name can be up to eight characters long. Input to this field is required.
Useful Life
required
The useful life of the asset in years is entered in this field. This is the period of depreciation for the asset.
Purchase Cost
required
The purchase cost of the asset is displayed in this field. The field is 14 positions wide. In most cases, the purchase cost is derived from the Accounts Payable System as a direct purchase. No data entry is allowed directly in this field. The purchase cost must be entered in a transaction entry as is shown later in this manual in the Fixed Asset Transactions and the Fixed Asset Setup sections.
Accumulated Depreciation
required when asset initially entered
This is the accumulated depreciation of the asset. The field is 14 positions wide and the data in this field is of type money. Initial creation of the fixed assets list requires data entry in this field. After the initial setup, data entry in this field should be avoided.
Salvage Value
optional
The estimated salvage value of the asset at the end of the asset's useful life is entered in this field. The field is 14 positions wide and is of type money. The straight line, declining balance, and sum of years digits methods of depreciation normally use this value. Regardless of the method used, the asset is not depreciated below the amount entered in this field.
Date of Service
required
The date on which the asset was placed in service is entered here. The field is 10 positions wide and is of type date. The depreciation or recovery cycle begins from this date.
Method
required
Select the depreciation method to be used for the asset from the following list:
Method Description
sl straight line
ddb declining balance
dbsl declining balance with switch to straight line
syd sum of years digits
acrs accelerated cost recovery
macrs modified accelerated cost recovery
Only the method code needs to be entered in the Method field.
Percent
required for methods using ddb rate
The Percent field is used by methods that employ a declining balance rate in calculating depreciation. The percent values recognized by the IRS for calculating depreciation using a declining balance rate are 150 and 200 percent. The IRS requires that you use 200 percent for new assets and 150 for used assets. If you are using either the declining balance method, the declining balance with switch to straight line method, or the macrs method that calculates depreciation using the declining balance with switch to straight line, you must enter either 150 or 200 in this field.
Active
required, default=yes
The Active field is a boolean field. Setting this field to yes indicates that the asset is to be depreciated. This field has a default value of yes. However, if this field is set to yes and the asset has been depreciated to its Salvage Value, the asset is no longer subject to depreciation. If this field is set to no the asset is not depreciated.
New
required
This field indicates whether or not the asset was purchased new. If the asset was purchased new, yes is entered into this field. If the asset was purchased used, no is entered. Although this field is used on reports it is not used in making any calculations.
Adjustment
optional
In some cases, when using either the accelerated cost recovery method or the modified accelerated cost recovery method, the purchase cost must be adjusted before it can be used as the basis for depreciation. The amount entered into this field is subtracted from the purchase cost, and the result is used when calculating depreciation. If the purchase cost does not need to be adjusted, the field may be left blank, or a zero may be entered.
Date of Disposal
optional
This field is used with assets that are depreciated using either the acrs or the macrs methods. If an asset is disposed of or retired before the end of its useful life, the date of the asset's disposition must be entered here in order for the depreciation for the year of disposition to be properly calculated.
Controlling Account
required, validated
The general ledger account for the fixed asset subsidiary ledger is entered in this field. Multiple controlling accounts are acceptable, i.e., different controlling accounts can be used for each asset or type of asset. A validation screen is associated with this field that accesses the General Ledger master file.
Depreciation Expense
required, validated
The depreciation expense account from the list of general ledger accounts is entered in this field. Multiple expense accounts are acceptable. A validation screen is associated with this field that accesses the General Ledger master file.
Accumulated Depreciation
required, validated
The total amount of depreciation at time of entry or total amount of depreciation calculated by the system is kept in the account whose number is entered in this field. Multiple accumulated depreciation account numbers are acceptable. A validation screen is associated with this field that accesses the General Ledger master file.
The second screen of the fixed asset form is displayed when either acrs or macrs is entered in the Method field on the first screen of the form. This part of the form provides more detail for these two types of depreciation and is shown below.
Depreciation Method
display
The depreciation method entered in the Method field on the first screen in this form is displayed here. This field is display only and cannot be changed.
MACRS Method ddb
optional
If this asset is to be depreciated under the MACRS method using declining balance with switch to straight line, enter yes in this field.
When the MACRS method is being used, yes must be entered into either this field or the next field MACRS Method sl.
MACRS Method sl
optional
If this asset is to be depreciated under the MACRS method using a modified version of the straight line method, enter yes in this field.
When the MACRS method is being used, yes must be entered into either this field, or the previous field, MACRS Method ddb.
Half-year Convention
optional
Enter yes in this field if you want to apply the half-year convention to the depreciation calculated using either the ACRS or the MACRS method.
When the half-year convention is applied to an asset depreciated under the ACRS method, a half year of depreciation is taken for the year the asset is placed in service. If the asset is held for its entire useful life, a half year of depreciation is taken in the year following the last year of useful life.
If the half-year convention is applied to an asset depreciated under the MACRS method, a half year of depreciation is calculated for the year the asset is placed in service. If the asset is held for its entire useful life, a half year of depreciation is taken in the year following the last year of its useful life. Applying the half-year convention under the MACRS method differs from under the ACRS method as it applies to the early disposition of the asset. If the asset is disposed before the end of its useful life under the MACRS method, a half year of depreciation is taken for the year of disposition.
Depreciation in the year of early disposition under the ACRS method is determined by the Deduction in year of disposition? field along with the Disposition Conventions fields.
Mid-month Convention
optional
Enter yes in this field to apply the mid-month convention to depreciation calculated using the MACRS method.
When the mid-month convention is applied, a half a month's depreciation is taken for the month the asset is placed in service. If the asset is disposed before the end of its useful life, a half a month's depreciation is taken for the month in which the asset is disposed.
Mid-quarter Convention
optional
Enter yes in this field to apply the mid-quarter convention to depreciation calculated using the MACRS method.
When the mid-quarter convention is applied, a half a quarter's depreciation is taken for the quarter in which the asset is placed in service. If the asset is disposed of before the end of its useful life, a half a quarter's depreciation is taken for the quarter of disposition.
ACRS Method sl
optional
If you wish to depreciate the asset under the ACRS method using the straight line method enter yes in this field. When the ACRS method is calculated this way it is also known as the Alternate ACRS method. The half-year convention is frequently applied when the straight line method is used under ACRS.
ACRS Method table
optional, validated
This table must have been previously entered through the menu choice ACRS Tables. The table represented here contains the yearly percentages used to calculate depreciation. You may query the ACRS tables through the validation form associated with this field.
Deduction in year of disposition?
optional
This field is only used with the ACRS depreciation method and applies to the early disposition of an asset. Generally the IRS does not permit depreciation to be taken for the year in which the asset was disposed. This rule usually applies to 3-year, 5-year, and 10-year properties. If this rule applies to this asset, enter no in this field. On the other hand, the IRS does allow depreciation to be taken in the year of disposition for other types of properties such as 15-year, 18-year, and 19-year properties. If depreciation should be calculated in the year of early disposition, enter yes in this field.
Usually one of the disposition conventions, full-month or mid-month, is applied to depreciation taken in the year of early disposition.
Full-month Disposition Convention
optional
This convention is used with the ACRS method. It is applied to depreciation taken in the year the asset is disposed. When this convention is applied (yes), no depreciation is taken for the month in which the asset is disposed.
Mid-month Disposition Convention
optional
This convention is only used with the ACRS method. It is applied to depreciation taken in the year the asset is disposed. When this convention is applied (yes), a half month's depreciation is taken for the month in which the asset is disposed.
Limit Table
optional, validated
The IRS sometimes limits the amount of depreciation that can be taken in a year. These limits must entered into a limits table through the menu choice Select, Fixed Assets, Depreciation Limits. The limits tables can be queried through the validation form associated with this field.