NetAsset - Asset Journal Entries - Overview
Overview
This article presents a detailed overview of the journal entries generated by the NetAsset system.
Unless specified otherwise in individual examples, all entries are based on an asset with the following characteristics:
- Asset Type: Building
- Acquisition Date: 1/1/2022
- In-Service Date: 1/1/2022
- Go-Live Date: 1/1/2022
- Capitalized Asset Value: $3,000,000
- Useful Life: 120 months
- Residual Value: $0
Go-Live Entries
For this go-live example, the Acquisition Date and In-Service Date are both assumed to be 1/1/2020.
This one-time entry is recorded at the conclusion of the implementation process to establish fixed asset and accumulated depreciation balances on the books as of the go-live date. Any difference between the fixed asset and accumulated depreciation amounts is posted to a clearing account, with clients typically establishing a dedicated go-live clearing account for this purpose:
Manual Reversing Entry at Go-Live
Note that a corresponding manual entry will be required to reverse the pre-NetAsset balances as of the go-live date. This reversal is necessary because, as noted above, NetAsset generates entries to establish asset balances at go-live. Failure to reverse the existing balances would result in double counting on the balance sheet. For more information regarding this manual entry, refer to the NetAsset – Go-Live Overview article.
The following is an example of the general ledger impact for a native NetSuite journal entry that could be booked to reverse the pre-NetAsset balances of the example asset:
| Account | Debit | Credit |
| Go-Live Clearing | 2,400,000 | |
| Accumulated Depreciation | 600,000 | |
| Fixed Assets | 3,000,000 |
Capitalization Entries
For new assets added after the full implementation of NetAsset, a go-live entry is not required. Instead, a capitalization entry is recorded to recognize the asset on the books:
Depreciation Entries
NetAsset generates the depreciation schedule for each asset and automates the recording of monthly depreciation entries:
Revaluation Entries
Once an asset is placed in service, any necessary adjustments must be made through a revaluation. NetAsset supports several types of revaluations, three of which impact the general ledger and generate corresponding revaluation entries: True Up, Write Down, and Write Up. Examples of each revaluation type are provided below:
True Up Revaluation
In this example, it was determined that the asset’s Capitalized Value at In-Service should have been $3,500,000. As a result, a True Up revaluation was processed to correct the accounting as of the current period:
Write Down Revaluation
In this example, the asset was written down by $500,000:
Write Up Revaluation
In this example, the asset was written up by $500,000:
Note: Write-ups are permitted under IFRS but are prohibited under U.S. GAAP.
Disposal Entries
NetAsset also supports asset disposals. In this example, $5,000 was received in connection with the disposal:
Transfer Entries
Once an asset is placed in service, it can be transferred between departments, classes, locations, or subsidiaries. In the example below, the asset was transferred from one subsidiary to another:
Split Entries
NetAsset supports asset splits. In this example, the original asset is split into two new assets of equal value. The system first books a split entry to remove the original asset from the books. Two new assets are then created with a status of Pending. The next steps would then include generating depreciation schedules, queuing the assets for capitalization, and booking the corresponding capitalization entries. An example of a split entry is shown below:
Build Up Entries
It may be necessary for a pending or in-service asset to have its value built up through the addition of a new item or expense coded to the Fixed Assets Clearing or Construction in Progress accounts. NetAsset supports this process by allowing users to run build-ups. In this example, a vendor bill was used to add $50,000 of value to an already capitalized asset via a build-up entry:
Note: If the asset is in Pending status, a separate build-up entry will not be generated, as the asset has not yet been capitalized. In this case, the built-up amount will be combined with the original value and recorded as part of the capitalization entry once it is processed.