NetAsset - Write-Down (Impairment)

Use Case: The Write-Down revaluation, the most common revaluation type, can arise when the market value of an asset declines below its normal carrying amount.

Prerequisites: Asset revaluations must be entered in NetAsset within the month and prior to month-end depreciation.

STEP BY STEP PROCESS

Navigate to an NetAsset record where the revaluation is to be recorded and click the Revalue button.
On the Asset Revaluation page click the down arrow on the Revaluation Type field and select Write-Down.

Next, update the fields as necessary for the asset revaluation:

Field	Description	Example
Effective Revaluation Date	The start date of the period of the revaluation should take place. Defaults to the first period without a journal entry booked.	03/01/2020
Depreciation Method	Change the method by which the asset will be prospectively depreciated.	Straight Line
Useful Life at In-Service	Adjust to the useful life of the asset to extend or retract the current useful life.	48
Remaining Useful Life	Adjust to the remaining useful life of the asset to extend or retract the current useful life.	36
Residual Value Estimate	Update the residual value estimate to be any number less than the current net book value and greater than or equal to 0.	10,0000
Residual Value Percentage	Update the residual value percentage to be any number between zero and 100 to automatically populated the residual value estimate based off the original net book value.	50%
Write-Down Amount	The amount to write-down the asset by. Cannot exceed the current Net Book Value.	5,000
Revaluation Note	Provide a brief description of the basis and adjustments made with the revaluation for subsequent support and reference.	Neighborhood devalued

After double-checking inputs for the revaluation, click Revalue Asset
- NOTE: The NetAsset Setup System Setting, Revaluation Accounting, determines how the write-down will hit the GL. The following detail the available options:
  - Adjust Gross Assets
    - All adjustments up or down are recorded to the Fixed Asset Account (Gross)
  - Adjust Accumulated Depreciation
    - All adjustments up or down are recorded to the Accumulated Depreciation Account (Gross)
  - Increase to Gross, Decrease to Accumulated Depreciation
    - Upward adjustments are recorded to the Fixed Asset Account (Gross) and adjustments down are recorded to the Accumulated Depreciation Account (Gross)
  - Increase to Gross, Decrease to Accumulated Impairment
    - Upward adjustments are recorded to the Fixed Asset Account (Gross) and adjustments down are recorded to the Accumulated Impairment Account (Gross)
You will be navigated back to the asset record where you can refresh until the Processing Status no longer reads Processing Revaluation...
The Effective Revaluation Date Period will be split into two entries, one to record the GL Impact of the Revaluation and one to record the normally scheduled depreciation.

Click on hyperlink to the NetAsset Revaluation Entry to see the adjustment to the Accumulated Depreciation Account or Fixed Assets Account based on Revaluation Accounting settings and the offset booked to the Impairment Expense Account.
- NetAsset setting Revaluation Accounting is set to Adjust Gross Assets
  - Debit Asset Type’s “Impairment Expense Account” for the Write Down Amount specified on the Revaluation
  - Credit Asset Type’s “Fixed Asset Account” for the Write Down Amount specified on the Revaluation

NetAsset setting Revaluation Accounting is set to Adjust Accumulated Depreciation or Increase to Gross, Decrease to Accumulated Depreciation
- Debit Asset Type’s “Impairment Expense Account” for the Write Down Amount specified on the Revaluation
- Credit Asset Type’s “Accumulated Depreciation Account” for the Write Down Amount specified on the Revaluation
NetAsset setting Revaluation Accounting is set to Increase to Gross, Decrease to Accumulated Impairment

An NetAsset Revaluation record will be saved on the Revaluations subtab of the asset to saved historical data before and after the revaluation
Clicking the Edit link will reveal the asset information both before and after the revaluation

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