Fixed Assets - Controls That Impact Fixed Assets

• System Controls
• Fixed Asset Company Controls
• Common Controls
• • Calendars
  • Currency
  • Control Accounts
  • Fixed Assets and Inter Company Accounting
  • Fixed Assets and Intra Company Accounting
  • General Ledger Account Code

System Controls

The Fixed Asset System Controls affect all of the companies that operate in the system. These controls are contained on one screen

Company Controls

Company Controls determine how a specific Fixed Assets company operates within a potentially multi-company environment.

The Company Controls have to be established prior to the Asset Register becoming operational. A number of the controls established will be fixed after being updated, for example the fiscal calendar to be used to set period end dates. A number of defaults can be established which will impact upon many Fixed Assets tasks, for example, the default asset residual value.

Common Controls

Fixed Assets processing makes extensive use of the following common controls:

Calendars

There are two types of calendar that can be defined, fiscal and non-fiscal.

Fiscal calendars are used to determine the financial periods. There is validation to ensure that the periods are defined to cover the full year, i.e. the last day of the financial year must be a period end. Fiscal calendars can have events defined on them at more than one level. The financial periods are defined as the posting level. The other levels can be consolidations of the posting level. For example, the financial periods (or posting level) is monthly, level 2 is quarterly and level 3 is half yearly.

Examples of how such a calendar and events might be defined are: The last Friday in each month and calendar year end on a Friday,

• Every four weeks in the year
• The 25th day of each month and calendar year end on a 25th
• Twelve user-defined unequal intervals

Non-fiscal calendars do not have the same restrictions and allow a calendar definition to be made with events positioned as required. Examples of such a calendar and events might be: The last Friday in each month,

• Every four weeks in the year
• The 25th day of each month
• Twelve user-defined unequal intervals
• 1st January, 1st April, 1st July and 1st October
• Every working day
• Every Monday, Tuesday, Wednesday, Thursday except Bank Holidays

Calendars can be used by a Fixed Assets company to indicate any of the following:

• The date for the end of each period
• The dates on which depreciation should start, used on initial valuations
• The dates on which depreciation should end, used on disposals
• Those days in the year that should count as depreciation days and so act as a weighting factor on straight line weighted depreciation

Thus, for example, we could have:

• A fiscal calendar with events giving a period end on 28th of each month
• A non-fiscal calendar with events to give the start of depreciation on an asset valuation only at quarterly intervals, i.e. depreciation start date(s) must be one of 1st JAN, 1st APR, 1st JUL, 1st OCT
• A non-fiscal calendar with events to give the end of depreciation on an asset disposal only at quarterly intervals
• A non-fiscal calendar with events defined on every Monday, Tuesday, Wednesday, Thursday, except Bank Holidays and be used for weighting depreciation method

For the Fixed Assets company controls the calendar must be a fiscal calendar and satisfy the following validation. The calendar must have 12 or 13 events defined on it and the number 12 or 13 must agree with the number entered on the Fixed Assets company controls 12 or 13 Period Calendar field.

Currency

The currency routines impact on Fixed Assets at different stages:

• Defining a company on the system, common Company definition MAAF
• Setting up a Fixed Assets company, Fixed Assets Company Controls MFAB
• Defining a book that operates in a non-base currency, User Book MFCB
• Holding a foreign currency when registering asset details, Asset Edit MFDB

A base currency must be nominated on each Company definition MAAF.

If it is required to maintain foreign currency details in Fixed Assets, then a valid currency rate type should be entered on Fixed Assets Company Controls MFAB. If a currency rate type is not entered, then foreign currency details cannot be maintained. For EMU participating companies, the following information also applies: if the EMU Flag is set to Y on Company - Edit MAAF, then all currency conversions which involve a participating currency or the Euro, see Currency - Edit MAGB, must use the system reserved '**' Rate Type, the participating date and the fixed exchange rate.

For foreign currency use, the following must be true for the specified non-base currency:

• A relationship is defined between the non-base currency and the Company base currency
• The Fixed Assets Company Controls rate type is valid for the relationship between the non-base currency and the base currency
• There exists at least one exchange rate for the rate type and the relationship

A non-base currency can be nominated on any User Book MFCB.

When these conditions are satisfied then valuations can be performed on a User Book with valuation details held in financial values other than the base currency.

It is also possible to hold foreign currency details on asset records. The entry of foreign currency details on Asset Edit MFDB is quite independent of maintenance of valuations on a User Book with a non-base currency.

NOTE The currency routine will use the asset date of acquisition to determine the appropriate exchange rate. It will use the exchange rate that is latest but prior to the date of acquisition. If there is no exchange rate prior to the date of acquisition it will use the earliest entered exchange rate. For EMU participating companies, the following information also applies: if the EMU Flag is set to Y on Company - Edit MAAF, then all currency conversions which involve a participating currency or the Euro, see Currency - Edit MAGB, must use the system reserved '**' Rate Type, the participating date and the fixed exchange rate.

NOTE There are no postings of foreign currency amounts to the General Ledger. If e5 General Ledger is installed then the enquiry routines can be used to view amounts held in accounts with a currency applied.

Control Accounts Overview

Control accounts for use in Fixed Assets are defined as a set in Fixed Assets Control Accounts Edit MFAD. A set of accounts can be used at the Company Level or on an element in a management reporting structure. Thus the set of accounts nominated on the Fixed Assets Company Controls will be used for transactions into and out of the company. The set of accounts nominated at a lower level i.e. an element, will be used for Intra Company Accounting.

If using a General Ledger, then at least one set of Control Accounts must be defined for each Company. There is one set of Control Accounts defined on the Fixed Assets Company Controls.

Fixed Assets and Inter Company Accounting

Trading can take place between separately maintained companies on an e5 system.

Inter company accounts should be nominated for transfers between companies on the system. Transfers can be made at three levels: between companies, between categories and between locations. At the highest level, inter company transfers, there are certain requirements. Both companies involved in a transfer must have the same number of financial periods within a year and both companies need to be operating within the same financial period and year. When performing an inter company transfer, it must be ensured that the transfer-to company has Fixed Assets Company Controls defined.

NOTE An Inter Company transfer whether mass, single, full or partial, is prevented if either the transfer-from company or the transfer-to company is using Intra Company Accounting (ICA).

Inter company transfers can be performed between any two Fixed Asset companies. However Inter-Company Accounts can only be defined if the two companies concerned have the same account code definition.

Consider the transfer-from company.

A transfer will use the inter company account for the transfer-to company if there is a batch type defined for transfers on the Fixed Assets Company Controls.

Suppose the transfer-from company is T1 and the transfer-to company is R1.

Diagram fa050

Consider the transfer-to company.

A transfer will use an inter company account, defined in the transfer-to company, if:

• The Post to GL on Transfers flag in the transfer-from company is not set to 3 (Do Not Post Transfers)
• There is a batch type for transfers in the transfer-from company
• There is a batch type for transfers in the transfer-to company

Continuing the above example, (note that the batch type for transfers in T1 does exist):

Diagram fa060

The transactions that are posted will net to the asset historic net book value. They can include asset cost, the amount of depreciation and amount in reserves.

Consider an asset which is transferred from company T1 to company R1 with settings as described above. This means postings will be made in both company T1 and in company R1. This asset has 15000 in the asset cost account, 7500 in the asset depreciation account and there have been postings of 11500 to the reserves account because of revaluations.

Note that although it has been stated that these inter company accounts are used they are not mandatory. The debtors control and creditors control will be used as defaults.

• In company T1, if there has been no inter company account entered for company R1, then the debtors control account will be used instead of 1010R1
• In company R1, if there has been no inter company account entered for company T1, then the creditors control account will be used instead of 5200T1

Fixed Assets and Intra Company Accounting

Intra Company Accounting is dependent on General Ledger Structures definition for its functionality. If using other modules, the postings from those modules to General Ledger will impact on ICA. The integrity of ICA is therefore maintained across the functionality of all modules and Fixed Assets cannot be considered in isolation. The ICA User Guide should be referenced.

In the Fixed Assets module the ICA functionality is achieved by nominating a management code. This can be a Balance To Zero Element or the management code can be lower in the structure than a BTZ Element. Unlike other modules the user does not state the BTZ Element. This is displayed by the system once the management code has been entered.

Further information can be found in the Groups and Categories section of the Register Structure Overview, where the Override Code-Id functionality is also described. This functionality, like ICA functionality, provides for automatic overrides of a nominated management code. However it is simpler and, unlike ICA, there is no balance to zero requirements across elements. The Override Code-Id functionality and ICA are mutually exclusive.

General Ledger Account Code

The 50 character account code can be broken into segments to define the required account structure. Each segment is recognised by an account code-id, A, B, C, D, etc. This account definition should be set up when a General Ledger is used (e5 or users' own), on System Controls MAAB:

General Ledger  Y  Users GL

or

General Ledger  Users GL  Y

The benefit of an account definition, even if not using e5 General Ledger, is that users are presented with meaningful account fields. If the using a different GL, the fields can be entered without validation, unless some user exit validation of the account codes is established. If no General Ledger is used, Fixed Assets will not display the account code fields and therefore it is not necessary to provide an Account Code definition.

The account definition is made in Account Definition Edit MAKB. Care should be taken when inserting the definition, as the account code field size is not amendable.

There is a facility to automatically insert a management code on registration of an asset. This is done by nominating one of the management code-ids on the category.

Note: The above functionality regarding management codes is applicable to companies operating without Intra Company Accounting (ICA).

The nominal or management code descriptions have not been painted on the Fixed Assets screens. The description fields defined within the Account Code Definition MAKB are used, if specified.

So, for example, the following account definition might be made:

Accounts would then be entered under these headings:

The management code-id B might be nominated for automatic insertion of the management code for Division. See Groups and Categories for further information.

Analysis codes are not used in Fixed Assets. Although transactions in other modules, (e.g. General Ledger), use analysis codes and might pass transactions to the Prompt File or Asset Edit, the analysis code data is not passed into Fixed Assets.

See also

Fixed Asset Home Page