Fixed Asset Enhancements in Microsoft Dynamics 365
Almost all type of industries have fixed assets. An asset is defined by its ability to create value for the business and as the value of fixed assets varies with the passage of time due to certain reasons like wear & tear, depletion or other factors can cause changes. It is very important for an industry to allocate the cost of a fixed asset over its useful life.
The purpose of depreciation is to match the cost of the fixed asset over its productive life to the revenues the business earns from the asset. It is very difficult to directly link the cost of the asset to revenues, hence, the cost is usually assigned to the number of years the asset is productive. Over the useful life of the fixed asset, the cost is moved from balance sheet to income statement. So depreciation of fixed assets is very important process for every type of organization. Dynamics 365 has provided a solution to depreciate fixed assets in a good manner.
1. Track Fixed Asset Valuations by Using a Single “Book” ConceptIn previous versions of Dynamics AX, two separate types of valuation were used to track fixed asset values i.e. value models and depreciation books. Microsoft Dynamics 365 has provided the solution in better way as it merges these two concepts into a single valuation concept named Books, which have all of the functionality of both value models and depreciation books.
Navigate to following path for the setups of books.
- Navigate the following path: Fixed Asset > setup > Books
2. Cross-Company Depreciation RunsDynamics 365 has provided a better solution to user to start a depreciation run for assets across all legal entities from a single page. There is also a new option to automatically post the journals after they are created. User can run the depreciation of creation and posting journal in the background while sending them to batch processing.
Before running the Depreciation proposal, the user needs to do some setups in Fixed Asset Parameters.
- Navigate the following path: Fixed Assets > Setups > Parameters
- Navigate the following path: Fixed Assets > Journal Entries > Create depreciation proposal
Once the setup is done, user can run the Depreciation proposal.
In the Legal Entities dropdown, user will see the list of all entities where the initial setup of Journal names in parameters was done. The user can select all the entities or an entity based on his requirement of calculation and posting of depreciation.
After selection, for automatic posting of entries user has to activate the Post journals button. This will calculate the depreciation and post all the required entries of depreciation.
- Fixed Asset valuation by using a single book functionality includes the ability to turn off posting to the general ledger.
- These enhancements reduce inefficiencies for each company. The enhancement also enables better centralized management of fixed assets.
Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of Systems Limited, or any other entity related to Systems Limited.