NetAsset - Asset Journal Entries - Overview
Overview
This article provides a detailed description of the journal entries that may be generated by the NetAsset system.
Unless stated otherwise in the specific example, all entries below are based on an asset with the following characteristics:
- Asset Type = Building
- Acquisition Date = 1/1/2020
- In-Service Date = 1/1/2020
- Go-Live Date = 1/1/2022
- Capitalized Asset Value at In-Service = $3,000,000
- Useful Life = 180 months
- Residual Value = $0
Go-Live Entry:
This is a one time entry that is booked at the end of the implementation process. It is the entry that puts the assets and accumulated depreciation on the books. The difference goes to a clearing account. In this example the Sale of Assets Rec (Clearing) account is used as the clearing account; however, a newly created NetAsset Go-Live Clearing account could be used instead. An offsetting manual entry is needed to remove current assets and accumulated depreciation from the balance sheet.
Manual Entry
| Debit | Credit | |
| Sale of Assets Rec (Clearing) | 2,599,999.92 | |
| Accumulated Depreciation | 400,000.08 | |
| Fixed Assets | 3,000,000.00 |
Capitalization Entry:
For new assets added after NetAsset is fully implemented a go-live entry is not necessary. Instead, a capitalization entry will be used to put the asset on the books.
Depreciation Entry:
NetAsset generates the depreciation schedule for each asset and automates the monthly depreciation entries.
Revaluation Entries:
Once an asset is placed in-service, any necessary changes must be done through a revaluation. There are 3 revaluations that can be run in NetAsset: True Up, Write Down, and Write Up. Examples of each type of revaluation are shown below.
True Up - In this example the Capitalized Value at In-Service of the asset changed from $3,000,000 to $3,500,000.
Write Down - In this example there was a $500,000 write down of the asset.
Write Up- In this example there was a $500,000 write up of the asset.
Disposal Entry:
NetAsset also has the ability to dispose of assets. In this example $5,000 was paid for the disposal.
Transfer Entry:
Once an asset is placed in-service you can transfer the asset between department, class, location or subsidiary. In the example below an asset was transferred from one subsidiary to another (from ACME Inc to ACME - North America).
Split Entry:
NetAsset has the ability to split assets. In this example the asset was split into two new assets of equal value. First, the system books a split entry to take the original asset off the books. Next, two new assets are created with status set as pending. You then need to generate the schedules, queue for capitalization, and then book the capitalization entries for the new assets. Below is an example of a split entry.
Split Entry
Capitalization Entries for New Assets:
New Asset #1:
New Asset #2:
Build Up Entry:
It may be the case that a pending or in-service asset needs to have its capitalized value built up via a new item/expense coded to Fixed Assets Clearing or Construction In Progress. You can run build up entries in NetAsset. In this example a $1,500 invoice was added to the asset.