NetAsset - Asset Transfers
Asset Transfers
Asset transfers in NetAsset allow you to move an asset’s current accumulated depreciation and gross asset balances between segments. The most common type of asset transfer is between subsidiaries, where an intercompany journal entry is automatically generated. Whether a transfer between other segments triggers a journal entry depends on your NetAsset system setup preferences. The historical depreciation entries run for the asset will remain unchanged. However, if it is necessary to move previous periods’ depreciation entries over to the new segments, the time machine feature allows users to rewind the asset back to an earlier period and then run an asset transfer in the earlier period. Alternatively, users can post a manual reclass entry of all of the depreciation expense in the current period.
This article will cover the underlying setup required to perform asset transfers, an explanation of the different fields that can be selected on an asset transfer page, how to troubleshoot errors that may come up during an asset transfer, and finally a description of what the subledger and transfer journal pages will look like following a successful transfer.
System Setup for Transfers
NetAsset is built to support the use of a single intercompany payable and receivable account with associated intercompany customers and vendors. It will still work if you have several accounts to represent transfers between each subsidiary pair, but requires more effort to setup.
Intercompany Accounts Setup
Accounts in your chart of accounts with the "Eliminate Intercompany Transaction" box checked are considered intercompany accounts. NetAsset will use your intercompany payable and receivable accounts, which will be required to post intercompany transfers between subsidiaries. Other types of transfers (department, location, class, or other segments) do not require intercompany accounts because they are not considered intercompany transactions.
You'll need to make sure that your intercompany accounts are available to all necessary subsidiaries, and you have an elimination subsidiary set up in each of your parent-child subsidiary nodes. This will allow the intercompany accounts to be cleared out.
For more information, use NetSuite's help documentation here:
Setting up Intercompany Accounts: https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_N1489768.html
Setting up Elimination Subsidiaries: https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_N268759.html
Intercompany Vendor/Customer Setup
Intercompany AP and AR accounts require intercompany vendors and customers, respectively. NetSuite has the ability to automatically create these intercompany entities. You can also set these up on your own if you prefer not to activate all the settings NetSuite requires to automate this creation.
Manual Creation: To manually set up customers and vendors, create an entity record (either customer or vendor) with a naming convention that helps identify it as an intercompany entity and the subsidiaries it relates to. Select the subsidiary the entity belongs to in the subsidiary field, then select the "represents subsidiary" as the subsidiary acting as a customer or vendor. Lastly, select the intercompany receivable or payable account in the Financials subtab, and fill out any other required customer or vendor information (perhaps adding additional currencies and subsidiaries available to the customer or subsidiary).
For more details, see NetSuite's help article: https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_N1490202.html
Automated Creation: NetSuite provides comprehensive guidance for automated creation of intercompany accounts.
Representing Entities: https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/article_159067444188.html
Prerequisites for automatically creating representing entities: https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/article_159127266292.html
Intercompany Preference Setup: https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_1549982657.html
Now that you've set up your intercompany accounts, vendors, and customers, you're ready to set up your transfers in NetAsset!
Global Transfer Settings
Users can decide which segments transferred between should trigger a journal entry and which ones should not. Segment fields are locked on the asset record once any entries are run on the asset. To change the segment information (location, department, class, or any custom segments), an asset transfer will need to be performed. By default, only subsidiary transfers will trigger a journal entry, but you can configure the system to generate journal entries to transfer assets out of any segment(s) and into its new segment(s).
Navigate to NetAsset > NetAsset Setup > System Setup. A series of checkboxes will be shown on the right side of the first page.
Checking any of these checkboxes will cause the system to generate a journal entry whenever you change the selected segments on a transfer entry. If a box is unchecked and that segment is changed upon transfer, there will not be a journal entry booked (unless another segment that DOES require a journal entry is changed at the same time).
Asset Types Setup
You can default each asset type to post transfers to a chosen intercompany payable and receivable account. Navigate to NetAsset > NetAsset Setup > Asset Types and Account Mapping and select any of your asset types. At the bottom of the account mapping field group, you’ll see two fields for your intercompany receivable and payable accounts.
If you have only one intercompany payable and one intercompany receivable account across all of your subsidiaries (or only one of each that you primarily use), you should populate these fields with those accounts for each asset type.
If you have several intercompany payable and receivable accounts for each subsidiary pair, you’ll instead want to leave these fields blank so the appropriate intercompany accounts must be chosen on the transfer page (your choice here can still be overridden on the transfer page, but if you leave the fields blank the system will require the user to select the appropriate accounts instead of defaulting them).
Reminder: NetAsset is built to support the use of a single intercompany payable and receivable account with associated intercompany customers and vendors. It will still work if you have several accounts to represent transfers between each subsidiary pair, but it will require extra setup.
Transfer Page Navigation
Now that you're all set up with your intercompany accounts, vendors/customers, NetAsset preferences, and asset type setup, you're ready to transfer your assets!
To get to the transfer screen from an asset page, you can just click the "Transfer" button at the top of your asset (assuming this button has been enabled on your asset records). Alternatively, you can navigate to NetAsset > Update or Modify Assets > Transfer Assets. Once there, you'll see this screen.
The transfer screen is naturally broken into 3 field groups; Filters, Transfer Destination Information, and Intercompany Transfer Overrides.
The filters field group is only used to filter down the list at the bottom of the screen to a subset of assets. Once you select the filters, you'll click the "Filter Results" button in the upper left to filter down the list. This is especially useful for transferring all of a subsidiary, department, or location's assets.
The transfer destination information field group is where you select what your chosen asset(s) new segmentation will be. Please note that if you want it to stay what it currently is, each segment has a "Do Not Update" selection choice that can be used. The only exception to this is the subsidiary field, which you WILL need to select as part of the transfer. For this reason, mass asset transfers will need to occur within a single subsidiary at a time.
Additionally, if you come to the asset transfer page from the "Transfer" button on an asset record, you'll see an additional "Current Asset Information" field group, pictured above. This field group is not adjustable, and simply tells you the current segmentation of the asset you've selected for transfer. Again, this will only be visible if you navigate to this page from an individual asset.
Lastly, the Intercompany transfer overrides section gives you the ability to select the intercompany receivable and payable accounts, and the intercompany vendors and customers needed to perform an intercompany transfer. These fields will ONLY be available for use and edit if the transfer is between subsidiaries; other transfers will not require or allow you to select these fields. Additionally, if you do not have the NetAsset System Setup setting "Allow Override of Transfer Accounts" checked, you will not be able to adjust the intercompany accounts set up on the asset type records. It may be useful to NOT check this box if you only have a single intercompany receivable and payable account to prevent users from being confused about which account to choose here.
ALL accounts are pulled into the dropdown selector for intercompany receivable and payable accounts, but ONLY vendors and customers marked as representing a subsidiary (which designates them as intercompany entities) are pulled into the intercompany entity selectors. The vendor selector will only allow you to choose a vendor representing the subsidiary you are transferring from, but you may choose any intercompany customer for the transfer. You may also override the exchange rate used on the transfer if you would prefer not to use the NetSuite provided exchange rate for transactions on a given day.
Once you've selected all of your destination information and included any necessary intercompany information, just hit the blue Transfer button, and the transfer will begin processing! You'll be taken to a transaction processing screen that will monitor the process; refresh the page to see the current status of the transfer.
Troubleshooting Errors
When transferring an asset, the system may run into errors. When this happens, you'll see this red banner come across the top of the screen of your asset record.
If you see this, just head on down to the System Notes subtab and take a look at the error. We'll look at a few common errors and how to correct them here.
1. "The [department, location, class, etc.] is either inactive or has not been made available in the asset's subsidiary".
This is a common error when transferring to a new subsidiary without updating the department, class, or location. If any of these segments aren't available in the target subsidiary, this error will be thrown. Go and check those segments to make sure they're available in the subsidiary, or just refresh the asset page and transfer the asset again, updating these segments to something available in the target subsidiary, or to "None".
If you go to look at any of these segments and don't see them in the list, it could be that this department, location, class, or other segment has been marked as inactive. In this case, you'll just need to change this department to "None" because it's no longer available for use in your NetSuite instance.
2. "The subsidiary selected for [To/From] Subsidiary on the journal entry and representing subsidiary of [Vendor/Customer] must match if you want to run intercompany elimination for this line."
This error, or any variation that looks like it, is essentially saying that you either selected the wrong intercompany vendor/customer for the subsidiary you're transferring to or from. You'll want to take a look at the vendor or customer, and check the representing subsidiary of that entity to make sure it's the right one. You may want to consider giving a more descriptive name to your intercompany entities to help you avoid this mistake in the future.
3. Any variations of the subsidiary not being available, or a subsidiary error associated with the vendor/customer record.
A lot of things can cause errors with intercompany transfers. If you encounter any error that isn't particularly specific but mentions an issue with subsidiaries and entities, go to the vendor/customer records you're using in your transfers and check the Financial and Subsidiaries subtabs. Make sure the subsidiaries you are transferring between are both included on the subsidiaries subtab (except for the representing subsidiary, which can't be included). Then make sure the currencies of each subsidiary are included on the financial subtab. This should fix most problems.
4. Most other errors should be descriptive enough for you to follow the system notes subtab.
These errors may include a necessary account not being included in the target subsidiary, accounts not being set up on the asset type, or other similar issues. Check the accounts and the asset types as a starting point for these errors. You will likely be able to see the issue from those pages.
Subledger and Journal Post-Transfer Breakdown
If you navigate to the asset page after a successful transfer, you’ll see two lines added to the schedule on the transfer period as shown below (this is assuming the segments you’ve changed required a journal entry. If they didn’t, you’ll just see the segment information in the header change without any entries on the subledger. For more information, see Global Transfer Settings).
The first line represents the movement of the asset out of the original segments, and the second line represents the movement of the asset into the new segments. The same journal entry will be linked on both lines, but the two schedule lines are used to properly reflect the transfer in NetAsset’s reports.
If you are transferring between subsidiaries, an intercompany journal entry will have been booked that looks something like this.
If no subsidiary information changed but a segment that requires a journal entry was changed, you’ll see a NetAsset Transfer Entry booked that looks something like this (note that the beginning department was Administration, and the ending department was Development).
It’s important to note again that the accumulated depreciation and gross asset balances were transferred, but not the historical depreciation expense. If you want to transfer the depreciation expense for periods prior to the transfer, you can do so with a manual journal entry, or you can use the time machine to revert the asset back to the earlier period, transfer the asset, and then run depreciation through the current period (this will require opening your periods back to whatever period you roll the asset back to).
And that’s it! From now on, depreciation, revaluations, and disposals will all hit the new subsidiary, location, department, or other segments that you’ve set in the asset transfer.