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Fixed Assets


In this company, the policy is to expenses off items that cost below $1000.

However, for tax purposes, they need to be able to track some of these items which have been expensed off - because for tax purposes, they are considered capital items and thus cannot be written off just like that.

For example, a check writer that costs $600. Since it is below $1000, this will be expensed off to an account, say 9.8850.

Yet, for tax computation, we need to track that we purchased this check writer and the capital allowances for this is 20% per annum.

How can we use the FA module to handle this?

Any ideas will be much appreciated. Thanks!



You could set up a separate Ledger Type for tax purposes and use straight line depreciation. This would allow you to track depreciation for an asset that was expensed in your AA ledger. You can actually have as many Ledger types for depreciation purposes as you need. Financial, taxes, revaluation, government reporting, etc...

Let me know if you'd like more detail.


XE SP 16
Win2000/Oracle 8.1.6.
There are several methods to create the and manage the
asset for 'off book' tracking. The easiest is to
create your assset master as normal. Then create aj
JE against your tax ledger (change the ledger from AA
to t1, t2, etc.) using the appropriate GL account.
Your asset refresh program should recognise the asset
and allow an attachment to your asset master.

An alternative to the journal entry is to enter the
beginning balance to your tax ledger directly by using
the beginning balance screen. This only allows
addition to the beginning balance field and the asset
will be depreciated for the entire year. Be sure and
leave the AA ledger blank or you'll end up with an
integrity error in your AA ledger.
--- ymchou <ymchou@hotmail.com> wrote:


World, OW B733X and Xe


Assume I buy a handphone for $800. I will charge to account 9.8120 (Employee Benefits). If this handphone had cost me $3000, I would have capitalised it and charged it to account 1.2090 (Other Assets).

Since it is only $800, it must be expensed out.

Does this mean that in my FA AAI set up, I need to include object 8120 under AAI item FX and FA? Otherwise, I will not be able to post the cost from GL and FA even though the ledger type is D1. Or is there another way to do it?

Hope you can explain in more detail to me. Thanking you in advance.
If you add account 8120 to your FX and FA AAI's, every
entry will appear in fixed assets. Remember that FA
AAI's automatically create asset masters and attach
cost information without any user input. This is not
what you want.

There are two methods to create assets with only tax
costs. Both require the manual creation of asset
masters. One method is to create a JE for the cost
and change the ledger from AA to D1. This also
requires you to setup the FX and FC AAI's so you can
capture activity to the account. This means you are
changing the AAI's many times as you add depreciation
only assets and you pass on AA ledger entries.

The second method is using the beginning balance
entry. This allows you to add costs to specific
ledger types without any JE. It also creates an out
of balance situation in your D1 ledger which typically
is no an issue with auditors.

If you need further information, contact me off line.
--- ymchou <ymchou@hotmail.com> wrote:


World, OW B733X and Xe


Here is another option.

Set up asset as normal. Post asset cost to the balance sheet. (1.2090 Other Assets). Set up a depreciation method to expense 100% of cost in the first month for the AA ledger. You should be able to override the expense account to the account you want. Then, your tax ledger will also be set up and you won't have to go through any extra steps.

The way I look at it, the phone ($800!!!) is still an asset worth keeping track of in the system. Now you can keep track of who the phone is assigned and if the phone is sold, the system will book the gain automatically (assuming you have your disposal rules set up.)

One question. If this is a real example, you are expensing the phone's cost to 9.8120 - Employee Benefits. Are you giving the phones to the employee? Are the phones considered Non Cash Taxible benefits? If so, I would question wheather you actually have to capitalize the phones for tax purposes. I would check this with your tax guy.

Let me know if you have questions.