Adding a fixed asset requires the use of the fixed asset data entry screen. Fixed Assets is selected from the Select, Fixed Assets menu. After the screen appears, it is put into the ADD mode by pressing the ADD <F6> button. The data is then typed into the fields.
The asset identification code is entered into this field. You must decide on the identification code to use. A suggested convention is to use either an abbreviation of the asset description, or your company pre-assigned asset numbers. A maximum of 15 characters (letters and digits) is allowed.
Data must be entered into the following fields:
Date of Service
Data entry in the Percent field is also required if using either the declining balance (Method = ddb), or the declining balance with switch to straight line method (dbsl). It is also required if the declining balance with switch to straight line method is being used with the modified accelerated recovery system (Method = macrs, ACRS Method = ddb).
General Ledger Integration
General ledger accounts must be entered into the following fields:
A validation screen that accesses the General Ledger master file is associated with each of these fields. So if you cannot remember the general ledger account to enter, do the following.
1. Press the <F1> key, and then press the V key, or press the VALID button. The general ledger validation screen is displayed.
2. Press the QUERY <F2> button, and then press the FIND <F3> button until the desired general ledger account is shown on the screen.
3. Press the <F1> key, and then press the E key. The Fixed Asset screen is redisplayed with the desired general ledger account automatically entered.
The accuracy of the data in each field should be verified. If an error is found, move the cursor to the field in error and make the correction. When satisfied with the data entered, press the STORE <F5> button to add the record to the file.
If acrs or macrs has been entered into the Method field, the second screen in the form is displayed as shown below.
Under the MACRS method, depreciation can be calculated using either the declining balance with switch to straight line method or the straight line method. To use the declining balance with switch to straight line method, enter yes in the MACRS Method field ddb. The straight line method under MACRS is also known as the Alternate MACRS method. To depreciate the asset in this way enter yes in the MACRS Method field sl.
Usually one of the three conventions: half-year, mid-month, or mid-quarter is applied to depreciation calculated under the MACRS method. To apply one of these conventions, enter yes in the appropriate convention field.
ACRS depreciation can be calculated in one of two ways. The standard way is to multiply the purchase cost by a percentage from one of the standard IRS tables. These tables are entered into the system through the menu choice ACRS Tables under the Select, Fixed Assets menu. If the asset is to be depreciated in this way, a previously entered ACRS table must be entered in the ACRS Method field table.
ACRS depreciation can also be calculated using the straight line method. This is also known as the Alternate ACRS method. To depreciate an asset this way, yes must be entered in the ACRS Method field sl. Generally the IRS requires that the half-year convention be used when the straight line method is used under ACRS. This requires that yes be entered in the Half-year convention field.
The IRS does not permit depreciation to be taken for some types of assets in the year they are disposed if they are disposed before the end of their useful lives. If this is the case, no should be entered in the field Deduction in year of disposition?. If depreciation is permitted in the year of disposition enter yes in the field Deduction in year of disposition?. If an ACRS asset is depreciated in the year of its disposition, one of the disposition conventions, full-month or mid-month, may be required. To apply a full-month convention to the depreciation calculated in the year of disposition enter yes in the disposition conventions field Full-month. If the mid-month convention is required, enter yes in the disposition conventions field Mid-month.
Limits on Depreciation
The IRS places annual limits on the amount of depreciation that can be taken for some types of assets depreciated using the ACRS or MACRS methods. These limits are entered into tables through the menu choice Depreciation Limits under the Select, Fixed Assets menu. Each table is entered with an identifying code. The code for the appropriate table is entered in the Limit Table field. Each limit table consists of the depreciation caps for each year of depreciation.
The limits tables may be queried from the Limits Table field through the validation form associated with it.