A leased asset is an asset associated with a lease deÞned in the Lease Management application.
This chapter describes how you can add individual leased assets directly in the Asset Management application by entering all the data required for each asset manually or by letting an addition template Þll in some of the Þelds.
Other ways to add assets are described in other chapters of this user guide.
To See
Add non-leased assets directly into Asset Management
"Setting Up Asset Management"
on page 21 Add assets in mass, based on
information that already exists in Accounts Payable or Project Accounting, or based on bar-coded data
"Adding Assets from Other Lawson Applications" on page 187
Interface assets, asset transactions, or attribute values from non-Lawson applications
"Interfacing Non-Lawson Assets"
on page 121
STOP Before you add an asset, you must perform setup tasks. For more information, see"Setting Up Asset Management" on page 21. For more information, see"Setting Up Reporting Parameters" on page 49. For more information, see"Setting Up Processing Parameters" on page 55.
In addition, you must complete the required setup tasks for the lease, as described in the Lease Management User Guide.
Concepts in this Chapter
TIP To skip directly to the procedures, see
"Procedures in this Chapter" on page 169
The following concepts provide background and conceptual information for the procedures within this chapter:
• "Adding Assets With Previous In-Service Dates" on page 164
• "Asset Class Addition Considerations" on page 167
• "Interaction between Lease Management and Asset Management"
on page 168
Adding Assets With Previous In-Service Dates
When you add assets that have an in-service date from the prior period, the Asset Management application lets you account for the depreciation that the asset should already have accumulated.
NOTE The end-of-year depreciation amount will be the same, whatever compute option you use.
Use the compute option, on Books (AM20.4), to control when Life-to-Date and Year-to-Date depreciation for the book is calculated. Details on how the Compute option is used when you adjust assets is found elsewhere in this user guide. For more information, see"Adjusting Assets" on page 233.
You can use the compute depreciation option when you add an asset record by using any of the addition procedures (Addition, Mass Addition, Quick Addition).
Calculating Depreciation when an Asset is Added
When you choose to have prior depreciation calculated at the time an asset is added, the entire catch-up depreciation for the prior depreciation period or periods is recovered at the end of the current period. The remaining periods in the year receive the regular depreciation.
Set compute option to
Y (Yes)
Journal entries
generated • Asset (debit) and Asset Clearing (credit)
• Depreciation Expense (debit) and Accumulated Depreciation (credit)
Result The asset book year-to-date amount for the current period is the same as if the asset had been depreciating routinely since its in-service date.
Additional steps
required If the in-service date for the asset is from a prior, closed year, you must manually post General Ledger journal entries for the accumulated depreciation of the prior year's depreciation expense.
Calculating Depreciation at Regular Period Closes
When you let the system calculate depreciation at the close of each period
depreciation for the prior distribution period or periods is spread evenly over the remaining periods for the rest of the current year.
Set compute option to
N (No)
Journal entries
generated • Asset (debit)
• Asset Clearing (credit)
Result The depreciation for the prior depreciation periods is fully recovered at the end of the current year.
Additional steps required
None.
Comments When you use the compute option of N (No) for assets with in-service dates from the prior period, the depreciation amounts shown for each period might not be the expected amounts. This is because depreciation must proceed at a higher amount per period than would otherwise be predicted to make the asset's basis depreciate to the end of its life.
Example: Calculate Depreciation for Prior Period, Current Year
Imagine that an invoice was received for a computer placed in service in the prior month. Use the compute option to have the Asset Management application calculate depreciation expense for the prior month when the asset is added.
Debit Credit
Asset X
Asset clearing X
Depreciation expense (prior period) X
Accumulated depreciation (prior period) X
Effect on General Ledger account balances
The prior month depreciation amount will be transferred to the General Ledger application in the current month.
The current month depreciation expense will be calculated during Þscal period close.
Example: Calculate Depreciation for Prior Period, Prior Year
Imagine that an invoice is received for a desk that was delivered in the prior Þscal year.
1. Use the compute option (when adding the asset) to let the Asset Management application calculate the depreciation expense for any prior periods in the current Þscal year.
NOTE AM20.4 will display the correct life-to-date amount, but prior year depreciation will not be posted to the General Ledger unless you create a journal entry.
2. You must create General Ledger journal entries to post accumulated depreciation for any prior year depreciation expense.
3. Use the Depreciation tab on Books (AM20.4) to view the year-to-date and life-to-date depreciation amounts.
System-Generated Entries Debit Credit
Asset X
Asset clearing X
Depreciation expense (prior period, current year) X
Accumulated depreciation (prior period, current year) X
Manual Entries Debit Credit
Depreciation expense (prior year) X
Accumulated depreciation (prior period) X
Effect on General Ledger account balances
Both the system-calculated prior period depreciation amount and the manually entered prior Þscal year depreciation amount will be transferred to the General Ledger application in the current month.
The current month depreciation expense will be calculated during Þscal period close.
Asset Class Addition Considerations
TIP Details on setting up the Asset Management application to use asset class depreciation are found elsewhere in this user guide. For more information, see "How Is Asset Class Depreciation Structure?" on page 63.
For asset class depreciation, proper implementation is critical to avoid over-depreciation. The following rules must be strictly enforced:
• All assets that belong to the same asset class must use the same type or type and subtype (and therefore, the same asset account, accumulated depreciation account, and depreciation expense account) and be posted to the same accounting unit.
• The type or type and subtype used must be deÞned solely for asset class assets and cannot be used for assets that are depreciated individually.
• Assets in one asset class must use a unique asset account not used by any other asset class or asset. The asset account is defaulted from the asset type or asset type and subtype.
• If the asset class is not deÞned at the accounting unit level, there must be a one-on-one correspondence between an asset type (or asset type and subtype) and an asset class, and the asset account deÞned for each asset type (or asset type and subtype) must be used only for the asset class.
• If the asset class is deÞned at the accounting unit level, one asset accounting unit and asset account combination must be used solely for one asset class. In other words, asset classes deÞned at the accounting unit level can share a type and subtype, but must be associated with a unique accounting unit and type combination or with a unique accounting unit, type, and subtype combination that points to a unique asset account used solely for the asset class.
• The accumulated depreciation and depreciation accounts used by an asset class can be used by other assets or asset classes as well, but all assets that belong to an asset class must use the same accumulated depreciation and depreciation accounting unit and accounts.
• When you add an asset that belongs to an asset class, you should either use only the default accounting unit, or use an accounting unit group that has the same accounting unit deÞned for the asset, accumulated asset, and depreciation expense accounts. If the asset class is deÞned at the accounting unit level, you should use the asset class accounting unit when you add an asset that belongs to that class.
• Lawson strongly recommends that you use an account group deÞned speciÞcally for the asset class, with its disposal accounts identical to the asset class type or subtype's accumulated expense account.
• All assets belonging to an asset class must be associated with the same Part 32 book.