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ASSETS REGISTER

Up to date information regarding any of your company's assets allows you to consistently produce accurate information on their physical location and any revenue loss on disposal. The necessity for different taxation and accounting values is also recognised.

Overview

The Assets Register is a register of the assets owned by a company or group of companies. SERENADE will process two sets of depreciation that it calls 'Tax' and 'Book'. It allows each item to depreciate at two different rates (for taxation and accounting) and allows a different method for the first year to the remainder.

Features
  • 3 character 'type' code linked to default depreciation
  • Unique 12 character code for each asset
  • 3 character 'sub-code' for associated items e.g. trailer for a truck
  • Items grouped by 'type' and owning 'department'
  • Budgets and Capital Expenditure processing
  • Inter-location transfers - either centralised system or separate remote systems
  • Separate Tax and Book values and depreciation
  • Different periods for depreciation
  • First Year depreciation can differ from the remaining years
  • Take-on values may be amended even after some depreciation has been calculated
  • Revaluation of items
  • Sell and 'Unsell' feature
  • Substantial numbers of reports available
Asset Codes

An asset code has 2 parts. The first part has 12 characters, and the second part has 3 characters.

This format allows you to use the first part of a code to identify a specific asset, and the second part to identify any separate components.

Example:

Asset ABCDEFGHIJKL = Truck Tractor Unit

ABCDEFGHIJKL-001 = Flat-bed Trailer

ABCDEFGHIJKL-002 = Container

Note: you do not have to use the second part of the code. It may be left blank.

Asset Types

Assets are grouped into types, independently of the asset codes, so you can produce reports in Asset sequence within Type. Type also has a standard depreciation parameters associated with it and when a new asset is entered these details are supplied automatically but may be amended.

Branches/Locations

You can run it at multiple, separate locations or use it as a centralised system.

The system will record the transfer of assets from location to location as necessary. Caution: if you are running separate ledgers at multiple locations, the system cannot cross-check that transfers are correctly entered at each location.

Tax and Book Values

The system has Tax and Book facilities. This means that you may have the same asset depreciated at different rates (and with two different values) so that the values can be used for different purposes. Typically the depreciation allowed by the taxation department is not the same as that experienced by the company so for legal purposes one value is used and for reality purposes the other value is used. If you are running SERENADE'S General Ledger module, the Tax and Book facilities may be linked to it so that Tax or Book postings may be made automatically at the end of a month.

Note: It is not essential to have the General Ledger to use the Assets Register system

Budgets and Capital Expenditure

The system allows you to enter budgets against which you can log the capital expenditure details of purchases and sales. If you sell an existing asset to supplement the budget, you should enter the realised value as a credit against the relevant budget. Example: if you trade-in one vehicle when you purchase another, you would enter the trade-in value as a credit against the vehicle purchase budget.

Note: the budget facility is optional. If you want to use it, you must first set an indicator in the system control record.

Asset Ownership

The system records each asset as owned by:

  • A particular location (e.g., a branch)
  • A department within the location.
General Ledger Link

The Assets Register can be linked to the General Ledger for automatic batching of postings. To enable this feature, set the 'Integrate Assets with G/L' indicator in the system control record.

You may post depreciation as Journals or as Accruals. If you make them accruals

  • They are automatically reversed in the General Ledger at month end.
  • The assets' year-to-date posted value is not updated. (The reason this is not done is to ensure that the assets' depreciation will calculate correctly in the next period).
Link Disabling

If you are not using the General Ledger or do not want the Assets Register to be integrated, set the indicator in the system control record to "N".

Posted Transactions

If linking is enabled, the system will post the following transactions to the General Ledger accounts:

  • Asset purchases
  • Transfers in and out
  • Revaluations
  • Depreciation
  • Sale values.
Sales and Transfer Out

When an asset is sold or is transferred to a remote (separate system) the system will:

  • Reverses the following figures out of the General Ledger
  • The original values (possibly as revalued)
  • Depreciation to start-of-year
  • Year-to-date depreciation
  • Leaves a net profit or loss on the sale to be posted as appropriate.
Revaluations

Revaluations are posted to the revaluation account when entered, but are reversed out using the Value Credit account when sold.

Operating without the G/L Module

If you are not using the SERENADE General Ledger module, but the integration indicator on the control record is set to do it the Assets Register system will make postings to the General Ledger interface file. You may list them from there whenever you need to, and clear the file at appropriate times (say) at year's end.

Depreciation

Assets are depreciated depending on:

  • First or The depreciation Value or Rate
  • The frequency of depreciation
  • Month by Month or YTD process
  • Subsequent year
Depreciation Rates

You can supply the depreciation figure as a standard value, or the system can calculate depreciation for you.

If you choose the latter method, you can set the system to calculate depreciation as:

  • A percentage of the original cost
  • A percentage of the start of year value
Frequency

You indicate for each asset whether it is to be depreciated

  • Daily (days in period),
  • Monthly/period
  • Quarterly
  • Annually.
Calculation Method (Year to Date)

The system uses the following four steps when calculating depreciation on an asset. It:

  • calculates the annual depreciation for the item
  • calculates depreciation so far this year, depending on the present period (or days) and the depreciation type
  • deducts any depreciation that has already been posted in the current year for that asset; then
  • creates an adjustment for posting to the ledger.

Examples of the second step:

Where an asset is to be depreciated monthly the depreciation so far this year is: the annual depreciation divided by twelve and then multiplied by the period number.

That is, Depreciation = (annual depreciation / 12) x P, where "P" is the period number in the financial year.

Quarterly depreciation calculated on a monthly basis is calculated as:

If the present period is Depreciation YTD is:

1-4 Annual depreciation x 0.25

5-7 Annual depreciation x 0.5

8-10 Annual depreciation x 0.75

11 or more Full annual depreciation

Advantage of this method

This method for calculating depreciation means you are free to change the depreciation rules part way through a year. If you do, the adjustment that the calculation procedure creates will automatically correct the posted Year-to-Date depreciation figure as soon as the new adjustment is posted.

Calculation Method (Month by Month)

There is an option that allows you to set the depreciation on an item as month only. This will take the annual depreciation value and divide it by 12 to arrive at the month's depreciation. This facility allows an item to have the existing depreciation so far this year retained (it was possibly at a different rate) and to continue at another rate.

First Year Depreciation

The system allows you to set a special code to modify how tax-value depreciation is calculated during the first year of an asset's life. You can set the code to indicate:

  • Proportional
  • Half
  • 6 months
  • All

There is an equivalent code that affects calculation of book value depreciation during the first year, but it is fixed by the system to indicate "Proportional". The first-year code affects the calculation of the total figure for first-year depreciation, but not how it is spread. When the figure has been arrived at, the system divides it evenly over the number of periods the asset was owned, regardless of which code was used.

Note: The first year decision is based on the comparison of the present Year/Period and the purchase Year/Period (not the take-on Year/Period).

The First Year Codes:

  • "Proportional" divides the calculated annual depreciation by the number of months that you have owned the asset.
  • "All" calculates for a full year, irrespective of the period in which the item was purchased.
  • "Half":
    • works as "All" if the item was purchased in the first half of your financial year, or
    • takes out half the allowed depreciation if the item was purchased in the second half of your year.
  • "6 months" always takes only half a year's depreciation, regardless of the period in which the item was purchased.
 

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Serrata Systems & Software Limited
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