I have presented and blogged more about Fixed Assets in Business Central than any other topic. Every Fixed Asset functionality I have discussed in my presentations and articles is Standard Functionality included with an Essentials Business Central License.
When Microsoft acquired Navision in 2002, the Fixed Assets granule in Navision was already loaded with functionality. There is little that Microsoft has added to the base Fixed Asset functionality since then and yet Navision, NAV, and now Business Central users rarely implement more than the basic acquisition and straight-line depreciation functionality.
When I started working for an end-user in 2008, they were using NAV to calculate the monthly depreciation but at the end of the year, they made adjusting journal entries to their general ledger based on what their outside accountant had calculated for depreciation. They also used their accountants’ tax depreciation calculations when they submitted their tax returns. We paid for each of these services.
One of my immediate goals was to eliminate the fees for the depreciation calculations from our outside accountant. That meant I was going to have to set up a second Depreciation Book; the original Depreciation Book was for financial reporting and the new Depreciation Book was for tax reporting. This is where I get a lot of questions during my presentations. “How do I set up and use a second Depreciation Book without screwing up my financial results?”
Depreciation Books
Below is a Depreciation Book Card:
The Depreciation Book allows you to set up additional controls like the FA Journal Setup, Disposal Methods, Rounding, Number of Depreciation Days in a Fiscal Year, etc. Today I am only focusing on setups for using multiple depreciation books.
The sample above shows that transactions for this Depreciation Book for Acquisition Costs, Disposals, Depreciation, Write-downs, Appreciation, Custom 1, Custom 2, and Maintenance are integrated with the General Ledger.
That means when you post a transaction to the Fixed Asset, there is a debit and a credit in the General Ledger.
A sample of other Depreciation Books are listed below:
Only one Depreciation Book can be integrated with the General Ledger.
Notice the difference between the Depreciation Book that is fully integrated with the General Ledger and the Depreciation Book that is not integrated.
The “Part of Duplication List” option is set to True in the nonintegrated Depreciation Books for those Depreciation Books you want to keep synced with the General Ledger.
Let’s see how that works.
FA Depreciation Books
The FA Deprecation Book is assigned to the individual Fixed Assets. In the example below, Fixed Asset FA000175 has been set up with three Depreciation Books. The Company Depreciation Book is integrated with the General Ledger, and it is the Default FA Depreciation Book for the Fixed Asset.
Both the Planning and the Tax Depreciation Books have been marked as “Part of the Duplication List.”
When the Fixed Asset is added to a Purchase Invoice, you have the option to check the “Use Duplication List.” If you were only using one other Depreciation Book, you could skip the “Part of Duplication List” and enter the second Depreciation Book in the “Duplicate in Depreciation Book” field on the Purchase Line.
When the Purchase Invoice is posted a Fixed Asset Journal will be created for this Fixed Asset with Acquisition Costs for the Planning and Tax Depreciation Books. The journal is not automatically posted when the Purchase Invoice is posted. It must be reviewed and posted separately.
If we navigate to the Posted Purchase Invoice and we “Find entries”…
…there is only one FA Ledger Entry.
If we look at the Fixed Asset…
…only the Company Depreciation Book has a Book Value.
Fixed Asset Journal
When you are working with a Depreciation Book that is integrated with the General Ledger the Fixed Asset G/L Journal is used to update the Fixed Asset Book Values. When you are working with a Depreciation Book that is not integrated with the General Ledger, the Fixed Asset Journal is used to update the Book Value.
By setting up multiple Depreciation Books, marking those Depreciation Books as “Part of the Duplication List”, assigning those Depreciation Books to the Fixed Asset, AND setting the “Use Duplication List” to true on the Purchase Line, Sales Line, or Fixed Asset G/L Journal those entries are recreated in the Fixed Asset Journal.
Below we see the Fixed Asset Journal lines that were created when we posted the Purchase Invoice. Notice there is no G/L Balancing Account on the Journal Lines.
After we post these Journal Lines, each of the Depreciation Books have a Book Value.
After posting the Fixed Asset Journal, when we return to the Posted Purchase Invoice and we “Find entries”…
…there are now three FA Ledger Entries, one for each of the Depreciation Books.
Final Thoughts
Fixed Assets are an easy to implement functionality in Business Central. You can use multiple Depreciation Books without screwing up your financial reporting, you can save on professional fees, and you can avoid spreadsheet errors from excel calculated depreciation.
If you do not know how to start your implementation of Fixed Assets in Business Central send me an email. Inquiries are always free.
For those who want an in-depth session on Fixed Assets, the half-day Implementing Fixed Assets class I taught at Academy at Community Summit North America last year is now a full-day class this year.
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