In order to effectively manage non-current assets and accurately report them in financial statements, it is crucial to maintain an inventory called the Asset Register, as recognized in accounting terminology. Our application simplifies the process of classifying assets into distinct categories, such as Equipment & Machinery, Property, Motor Vehicle, Furniture & Fitting, Computing Hardware, devices and software, Leased Asset/Right of Use, Intellectual Property, Goodwill, and Other Class, which streamlines your asset management. Any assets that do not fit into those aforementioned categories should be recorded under the "Other Class" classification.
To view a comprehensive inventory of individual items within each asset class, simply click on the asset class name and the detailed asset register will open up.
The detailed register entries are initiated from the Goods Received Note located in our BUY module. Upon receiving the asset from the vendor, a GRN is generated to record the receipt. In the event that an installation is performed prior to asset commissioning, we suggest that a completion report be prepared by the technical team to verify the readiness of the asset for use. To update the Asset Register from the GRN table, select "Update Asset Register" from the Action Menu. You will need to complete the form displayed below to collect information that has not already been entered by the app, such as serial number, internally tag number, or bar code - important for identifying and tracking the asset. The app will have already entered details directly from the supplier's invoice, such as original cost, tax, and delivery cost. If the installation is performed by someone other than the vendor, the installation cost should also be entered. To compute depreciation, you must provide the depreciation rate, residual value, and the start date for the utilization of the asset, which is also the start date for depreciation. The residual value is the estimated value you expect to recover from the disposal of the asset at the end of its useful life. This amount is excluded from the depreciation calculation.
After submitting your entries, navigate to the Asset Class Register. Then, access the applicable detailed Asset Register and select "Add Asset Item." The ensuing form will appear as shown below.
Within the dropdown, you will find a list of assets. Carefully select the appropriate asset before clicking the "Add" button located at the bottom right corner of the form. This will successfully add the asset to the register, as demonstrated below:
The Asset Class table provides a summary of assets by class. It is designed to represent information from the financial statements and interfaces with the general ledger by asset class. Each asset class has two ledger accounts assigned to it; one to record the original cost of assets and the other to record accumulated depreciation of all assets in that class. The net amount of the two accounts represents the total book value of all assets in that class.
Depreciation of all assets in each asset class is calculated daily, and the app will automatically post the total depreciation of each class to debit the depreciation expense of each class and credit the accumulated depreciation of the asset class.
To ensure the depreciation charge is activated for each class of assets, you must confirm the charge by clicking "Activate Depreciation Charge" in the Action Menu of the Asset Class table. Note that this is only required for the first asset added to that class of asset.
To dispose of an individual asset, you have two options: selling it or writing it off. To start the disposal process, open the detailed asset register for the asset class in question, and select the "Write-off/Disposal" button from the Action menu of the specific asset.
To add an item to the form, click the "Add Item" button to display a dropdown list of assets to choose from. You only need to fill in the selling price, as all other information will be downloaded by the app. At the top of the form, select the type of transaction (either disposal or write-off), with disposal indicating a sale in the context of the app.
Once you have completed and submitted the disposal form provided, the asset will be moved from the detailed asset register to the Write-Off/Disposal table, which can be accessed from the menu.
You will need to perform accounting entries in relation to the disposal, which can be done from the "Charge Accounts" option in the Action menu. This will involve debiting the Asset Class-Accumulated Depreciation (e.g. Accumulated Depreciation of Furniture & Fittings), debiting the Loss on Disposal of Asset, debiting the Buyer of Asset and crediting the Asset Class-Cost.
Next, create a debit note using the "Create Debit Note" button in the Action menu to bill the buyer for the sale.
Finally, the Approver from the Asset Register approval matrix will need to provide formal approval for the disposal to be complete.