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Fixed Asset Module and CIP Entries

  • 1.  Fixed Asset Module and CIP Entries

    Posted 8 days ago
    We are exploring the Fixed Asset Module in NAV. How do you manage CIP in the Fixed Asset Module? Is there a reclass function that moves it from CIP to the actual asset account? How do you control when to begin depreciation?

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    Monica Cubero
    Systems Finance Business Director
    HOLLY HUNT
    Chicago, IL
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  • 2.  RE: Fixed Asset Module and CIP Entries

    TOP CONTRIBUTOR
    Posted 8 days ago
    I've had clients handle this multiple ways.

    1 - post costs to a GL account using a dimension to capture costs for the project. They then use a FA/GL journal to credit the GL account and debit the assets once they are ready to start depreciation.
    ​2 - post to a generic fixed asset the various acquisition costs but they do not start depreciation. Those that use this method, often, block the record as another failsafe to stop depreciation from happening until they are ready. If you have multiple projects, you can use one fixed asset record and 'split' the asset when ready to start depreciation. Or you can have one fixed asset record per project.

    I've seen customer who post all acquisitions to a GL account and at the end of the month, they clear the account into fixed assets records.

    Hope this helps.

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    Kim Dallefeld
    Kim@Dallefeld.com
    Dallefeld Consulting, LLC
    Member of Dynamics Consulting Group
    Ft. Worth, TX
    2019 NAVUG Board of Advisors
    Past NAVUG Board Chairman
    NAVUG Programming Committee
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  • 3.  RE: Fixed Asset Module and CIP Entries

    TOP CONTRIBUTOR
    Posted 7 days ago
    I've always been a proponent of the use of a Fixed Asset in Progress Account. Record all transactions directly to that account. At the time the asset is being placed in service, review the charges related to an asset sitting in that account. Using the Fixed Asset G\L journal, capitalize the amount to be placed on the balance sheet for the asset and write off anything meant to be expense. This keeps your asset accounts nice and clean. The only transactions in and out then are placing in and out of service.

    That being said, you can create an asset card for your new asset and post directly to it through the Purchase Invoice and Purchase Order processes. You could still write off anything you need to at the time of placing in service and starting to depreciate.

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    Amanda Mayer
    New View Strategies
    Milwaukee WI
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  • 4.  RE: Fixed Asset Module and CIP Entries

    TOP CONTRIBUTOR
    Posted 7 days ago

    I think @Amanda Mayer and I are saying the same thing about using a GL account. It really does work very nicely and gives you a tremendous amount of flexibility.​​



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    Kim Dallefeld
    Kim@Dallefeld.com
    Dallefeld Consulting, LLC
    Member of Dynamics Consulting Group
    Ft. Worth, TX
    2019 NAVUG Board of Advisors
    Past NAVUG Board Chairman
    NAVUG Programming Committee
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  • 5.  RE: Fixed Asset Module and CIP Entries

    TOP CONTRIBUTOR
    Posted 7 days ago
    Yes, @Kim Dallefeld, you are correct. I should have been more clear that I was also talking about a G\L Account.​

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    Amanda Mayer
    New View Strategies
    Milwaukee WI
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  • 6.  RE: Fixed Asset Module and CIP Entries

    TOP CONTRIBUTOR
    Posted 6 days ago
    I have to agree with Amanda's procedure. We dallied with the idea of posting directly to the fixed asset but our is ,ahhhhhhhhh ,, shall we say a little weak on advanced planning.  Using a in process rule avoids having to educate every credit card holder , buyer , engineer, etc. on a cumbersome procedure to have accounting set up an asset prior to expenditures.

    So we stay with the simplicity of the in process account combined with project dimensions which has the ability for accounting to clean things up.

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    Michael Carr
    VP , Finance
    Philadelphia Scientific LLC
    Montgomeryville PA
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  • 7.  RE: Fixed Asset Module and CIP Entries

    Posted 6 days ago
    ​When we start construction on a new asset we go ahead and create a new fixed asset card in the fixed asset module.  While the asset is under construction we make sure to select "Manual" for the Depreciation Method and we leave the No. of Depreciation Years Field blank in order to prevent depreciation from being calculated during the construction process.  We also created a FA Posting Group called CIP which when selected will post all acquisition activity for this asset to our CIP G/L account rather than an asset G/L account.  While the asset is under construction all acquisition expenditures incurred for the asset will accumulate on the FA ledger.  At the completion of construction a normal G/L entry has to be made to move the total cost from the CIP G/L account to the desired asset G/L account.  At this time we also have to go in and change FA Posting Group, Depreciation Method, Depreciation Starting Date, and No. of Depreciation Years on the fixed asset card so that depreciation can start to be calculated based on the actual date the asset was placed in service.

    This process works well for us because we like that all the costs associated with constructing an asset are compiled together on the fixed asset card.  However I will note that our assets typically don't have more than a dozen or so input costs.  If you are constructing assets that have tons of costs associated with them then this process might not be as desirable if you want to maintain a simplified/clean asset ledger as @AmandaMayer mentioned.

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    Kelsey Colvin
    Barkley Ag Enterprises
    Yuma AZ
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