NetAsset - True Up Revaluation
Overview
When an asset is discovered to have been capitalized with incorrect information mid-life, resulting in inaccurate depreciation, a true-up revaluation corrects the accounting impacts without reversing historical activity. The true-up adjusts current period beginning balances to reflect what they should have been had the correct information been entered from inception. Historical depreciation information is retained in historical depreciation lines, and the system creates a true-up line linked to the revaluation entry. The system records any differences against depreciation expense. Future period schedule lines are regenerated based on the corrected asset information to ensure subsequent depreciation entries are calculated and booked correctly.
Prerequisites
Asset revaluations must be entered in NetAsset within the month and prior to the month-end depreciation run.
Step-by-Step Process
- Navigate to the NetAsset record requiring revaluation and click the Revalue button.
- In the Revaluation Type field, select True-Up.
- Update the following fields as necessary for the asset revaluation:
| Field | Description | Example |
| Effective Revaluation Date | The start date of the period when the revaluation should take effect. The true-up defaults to the first period without a journal entry recorded. | 06/01/2023 |
| Depreciation Method | The depreciation method that should have been applied to the asset since the in-service date. | Straight Line |
| Capitalized Asset Value | The corrected capitalized asset value as of the in-service date. | 1,843,500 |
| Accumulated Depreciation at In-Service | The corrected accumulated depreciation as of the in-service date. This field typically applies to mid-life asset capitalizations. | 20,000 |
| In-Service Date | The correct in-service date for the asset. | 01/01/2023 |
| Useful Life at In-Service | The corrected useful life at the in-service date. This field auto-adjusts when the Remaining Useful Life field changes. | 48 |
| Remaining Useful Life | The corrected useful life at the effective revaluation date. This field auto-adjusts when the Useful Life at In-Service field changes. | 43 |
| Residual Value Estimate | The residual value estimate. Must be less than the current net book value and greater than or equal to zero. | 10,0000 |
| True Up Clearing Account | The GL account for the true-up entry. | 1690 Fixed Asset Proposals (Clearing) |
| New Gross Asset Value | When Manually Adjust Balances is selected, the new gross asset value to adjust the book value. | 1,840,000 |
| New Accumulated Depreciation | When Manually Adjust Balances is selected, the new accumulated depreciation to adjust the book value. | 258,000 |
| Manually Adjust Balances | Select this checkbox to manually adjust the net book value. Selecting this checkbox enables the New Gross Asset Value and New Accumulated Depreciation fields. | 🗸 |
| Revaluation Note | A brief description of the basis and adjustments made for future reference and support. | Correction of original useful life |
- Verify all revaluation inputs and confirm the new financial information fields are correct for the current period, then click Revalue Asset.
- Return to the asset record and refresh the page until the Processing Status no longer displays "Processing Revaluation..."
- The system splits the Effective Revaluation Date Period into two entries: one to record the GL impact of the revaluation and one to record the normally scheduled depreciation.
- Click the hyperlink to the NetAsset Revaluation Entry to view how the system reverses the old asset G/L impacts and establishes the new G/L impacts.
- On the asset record, the system also creates a NetAsset Revaluation record—available on the Revaluations subtab—to preserve historical values before and after the revaluation.
- Click the Edit link for the NetAsset Revaluation record in the sublist to view the asset information before and after the revaluation.