NetAsset - True Up Revaluation
Use Case: In the middle of an asset’s life, a user may determine that an asset was capitalized and placed in service with the wrong information, resulting in incorrect depreciation life to date. If a NetAsset user elects not to reverse activity back to the original in-service placement, a true-up revaluation entry can instead be made to “true up” the accounting impacts to what the current period beginning balances should have been had the different information been input from the beginning. All historical depreciation information is retained with historical deprecation lines, and a true-up line is created with a link to the true-up entry. Any differences are recorded against depreciation expense.
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 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 True-Up.
- 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. Note that the true-up defaults to the first period without a journal entry recorded. | 06/01/2023 |
| Depreciation Method | Enter the depreciation method that should have been used to depreciate the asset since the in-service date. | Straight Line |
| Capitalized Asset Value | Enter the corrected capitalized asset value of the asset on the in-service date. | 1,843,500 |
| Accumulated Depreciation at In-Service | Enter the corrected accumulated depreciation of the asset as of the in-service date. This should only be for mid-life asset capitalizations. | 20,000 |
| In-Service Date | Enter the date the asset should have been placed in-service. | 01/01/2023 |
| Useful Life at In-Service | Enter the corrected useful life at the in-service date. This field is auto-adjusted with changes to the remaining useful life field. | 48 |
| Remaining Useful Life | Enter the corrected useful life at the effective revaluation date. This field is auto-adjusted with changes to the useful life at in-service field. | 43 |
| 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 |
| True Up Clearing Account | Select the correct GL account. | 1690 Fixed Asset Proposals |
| New Gross Asset Value | When the box to manually adjust balances is selected, enter the new gross asset value to manually adjust the book value. | 1,840,000 |
| New Accumulated Depreciation | When the box to manually adjust balances is selected, enter the new accumulated depreciation to manually adjust the book value. | 258,000 |
| Manually Adjust Balances | Select this box to manually adjust the net book value. Once this box is selected, the fields for new gross asset value and new accumulated depreciation will become editable. | Checked |
| Revaluation Note | Provide a brief description of the basis and adjustments made with the revaluation for subsequent support and reference. | Correction of original useful life. |
- After double-checking inputs for the revaluation, verify the new financial information fields are correct for the current period, then click Revalue Asset. 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 old asset G/L impacts reversed out and new G/L impacts re-established.
- An NetAsset Revaluation record will be saved on the Revaluations subtab of the asset to save historical data before and after the revaluation.
- Clicking the Edit link will reveal the asset information both before and after the revaluation.