Fixed Asset Disposition (FD)

Purpose

Part of maintaining an inventory of assets is to record the disposition of assets, and, if applicable, the selling price of the disposed asset.  Assets may be disposed of due to several reasons: your organization may replace certain types of assets on a regular basis, the asset may be worn and completed its useful life, or the asset may have been lost, stolen, etc.  Advantage Fixed Assets enables you to record the disposition of an asset and all of its components, to record the disposition of individual components, or to dispose a portion of the available units for components with multiple units.

The Asset can be disposed Externally or Internally.  In the case of Internal disposition, Advantage supports two models to record the internal disposition.

• Two document model – in this approach, the asset disposition will be recorded through a FD document with internal sale event type and the acquisition will be recorded through a FA document with Internal sale Acquisition / Betterment Event types.

• One document model: in this approach, only document (FS) will be processed to record the disposition as well as acquisition.

Fixed Asset Disposition (FD) External Disposition

Using the Fixed Asset Disposition (FD) document, you record information about an asset’s disposition.  This document records the retirement of the asset, the depreciation of the asset, offsets the revenue from the sale of the asset, and recognizes any gain or loss.

Periodically, your organization will need to archive the records of the disposed assets and then clear out these records from the Fixed Asset Registry (FAR).  Advantage Fixed Assets provides a report and an offline process to help you accomplish these maintenance tasks.

The FD document calculates the Depreciation till the date of disposition if the asset is depreciation. The FD document also calculates the negative depreciation when the Asset is depreciated but the disposition date is earlier than the last depreciation date.

The following main events occur when processing a FA disposition document:

• The document calculates depreciation, Gain or Loss on the disposition on validate or submit.

• The FA Registry tables are updated with the Disposition Date, Disposed Units, Number of units is reduced by the number of disposed units, Disposition method, Net Book value and Accumulated Depreciation are correspondingly reduced in case of Partial sale. In the case of full sale (when all units of the component are disposed) the net book value and accumulated depreciation are set to $0.

• If the depreciation is a non zero amount then a record is inserted to the Depreciation History table.

• On the full disposal of an asset any active records on the DEPEC table would be deactivated.

• In the case of full disposal any active records on the FA warranty table against the component is deactivated. This is not applicable for internal sale.

• In the case of full disposal any active records in the FA Infrastructure maintenance tables.

• Records are inserted to the FA component Journal.

• Records are inserted to the FA accounting Journal

Structure

The Fixed Asset Disposition (FD) document has four sections found in the secondary navigation area.  Each is broken down into various sub sections that contain groups of related fields.  Details on the individual fields can be found in the individual field helps for each field.  Many fields are not editable on this document.  Only those fields used to create and record the disposition postings are editable.  All others are completed with the Auto Apply action found on the Header and Component Line which bring information into the document from the Fixed Asset Registry tables.

• Header

  Lists general information about the document as well as information that applies to the asset as a whole versus the individual components of the asset. Click the Fixed Asset Equity Sources button to modify, add, or view existing equity sources for the selected Fixed Asset Number. Refer to the “Fixed Asset Equity Sources” section for more information.

  • General Information: This tab contains descriptive fields and date information common to most document Headers.  In addition to these common fields are ones for identifying a Fixed Asset Number, Event Type, Asset System Number, and Asset System Description.

  • Extended Document Description:  This tab contains the standard extended description field that is associated with the document.  It is not an extended description for the asset as it is not stored on any asset information tables.

  • Responsibility Center: This tab contains Chart of Account (COA) fields defined as being responsible for the asset. None of the fields in this section can be modified in the FD document.

  • Composite Asset Information: This tab contains many asset definition fields which serve as defaults to the individual Components of the asset.  Many of these fields control depreciation.  A field exists to record an amount of depreciation to record at disposition of a Composite Asset when that asset contains a Depreciation Method of Manual. None of the fields in this section can be modified in the FD document.

  • Disposition Information: This tab contains fields that control disposition postings as well as collect information for reporting purposes. This sub section has editable fields. These are the disposition date, selling price, disposition method, disposition authority, Disposition Code, Disposal Reason, Disposal Condition, Asset Status, Property Survey Report ID, Security Incident Report ID, and Police Report ID. The selling price is allocated to the different components in the proportion of the component net book value.

  

  • Document Information: This tab is common to all documents where fields are shown for whom and when a document was initially created.  Two additional fields record who was the last to perform a save on the document and when that occurred.

• Component

  Lists specific attributes of each asset component.  Components may be added during the life of the asset but cannot be added at time of disposition.  The Auto Apply action is also available on this page to retrieve values from the Fixed Asset Registry table for only the specified components.

  • Component General Information: This tab contains descriptive fields which are recorded for informational reporting on the component.  Only Component Number is editable in the case a user wishes to specify a specific component to dispose of instead of disposing of all components. The Asset System Number and Asset System Description are inferred from the FA document when Auto Apply is used.

  

  • Acquisition Details: This tab contains fields captured at acquisition. None of the fields in this section can be modified in the FD document.

  • Component Location Details: This tab contains the same location information as the Header for recording such details at a component that may be located at a different location as not all components may be physically attached to one asset. None of the fields in this section can be modified in the FD document.

  • Component Classification: This tab contains many of the same fields found on the Header for asset definition that will control depreciation.  Other fields include the Fixed Asset Classification field, which controls how the asset is recorded for accounting purposes, as well as fields to record the Balance Sheet Accounts that will be used for the asset. None of the fields in this section can be modified in the FD document.

  • Cost, Valuation, & Depreciation: This tab contains several information fields for reporting needs as well as various amounts accumulated to date before the disposal. None of the fields in this section can be modified in the FD document.

  • Disposition Details: This tab contains fields that control disposition postings as well as collect information for reporting purposes.  A field exists to record an amount of depreciation to record at disposition of a Component when that Component contains a Depreciation Method of Manual.  A value is automatically populated in this field by the application when the Depreciation Method is Straight Line. You can also record manually the new statistical unit in the case of a partial sale. This section also captures many other values. If a value is populated for a field on the Disposition Information tab on the Header for FA event categories FD, FS and FAIS, then the value is inferred to the same field on the Disposition Details tab on the Component section.

  

  Fields:

  Field Name	Required?	Description
  Disposition Date	Required	This is required on the FD document. Enter the date this asset was disposed.
  Disposition Method	Required	This is required on the FD document. The method of disposition.  Value must be valid on the Acquisition / Disposition Method (FADM) table.  This field is used to determine whether the gain or loss on a sale posts to an expense object or revenue source established on the System Special Accounts (SPEC) table.
  Disposed Units	Required	This is required on the FD document. The number of units disposed.
  Selling Price	Optional	This is required on the FD document and can be zero also. When a disposition document is used to dispose (or partially dispose) a fixed asset component, the selling price is allocated to each accounting line based on net book value.
  Memo Disposal Value	Optional	Enter an estimate of the value of this asset at disposition.
  Disposition Code	Optional	This field indicates the reason the asset is being disposed. Valid values are: Destroyed, Lost, Replaced, Sold, and Stolen.
  Asset Status	Optional	This field indicates the status of the commodity. Valid values are: Blank, Active, Inactive, and Surplus.
  Property Survey Report ID	Optional	This field indicates the Property Survey Report ID assigned to the FA Commodity.
  Security Incident Report ID	Optional	This field indicates the Security Incident Report ID assigned to the FA Commodity.
  Police Report ID	Optional	This field indicates the Police Report ID assigned to the commodity.
  Gain/Loss	Calculated	When an asset is disposed, the gain or loss is calculated based on the difference between the allocated selling price and net book value.
  Gain/Loss Account Type	Derived	Gain/Loss Account Type from the Component Line of the newly created acquisition document’s Component line.
  Last Depreciation Date	Derived	The Last Depreciation Date is updated any time the asset component is depreciated.
  Depreciation Amount	Calculated	If the Depreciation method is straight line method of depreciation the depreciation amount is calculated by the document on validate or submit. If the depreciation method is manual depreciation, then  it has to be entered manually. Entered or calculated deprecation gets allocated to all the Accounting lines under the component on the basis of the Net Book Value of the Accounting lines.
  Historic Asset Cost	Derived	The Historic Asset Cost represents the original amount at which the fixed asset was acquired.  This amount is inclusive of subsequent acquisitions, betterments, and increase/decrease adjustments.  It does not include depreciation and dispositions transactions.  The amount is provided as information to show the original, gross cost of the asset. Additionally the amount is used to calculate certain allocations.  On the Fixed Asset Disposition (FD) transaction it is used to calculate the apportionment of the selling price and any gain/loss to components when the selling price is entered on the Header.  On the Fixed Asset Selling Price change (FP) transaction it is used to calculate the apportionment of the change in selling price to components.
  Accumulated Depreciation	Derived	When a fixed asset document updates depreciation, the depreciation expense is allocated to the fixed asset accounting line based on the net book value (asset cost less accumulated depreciation) of the asset component's accounting line(s).  Each depreciation update is summarized as the Accumulated Depreciation Amount.
  Disposition Authority	Optional	Enter descriptive text that represents the disposition authorization.
  New Statistical Units	Optional	This field provides the ability to modify the Statistical Units associated with the asset component upon successful document submission.
  Disposal Reason	Optional	This field provides the reason that the FA commodity is being disposed.
  Disposal Condition	Optional	This field provides the condition of the FA commodity being disposed.

• Accounting

  Lists the Chart of Account (COA) details for how each asset component was funded.  All information at this level is protected and will be brought in from the Fixed Asset Registry Accounting Line table or from the Disposition document Header.

  • General Information: This tab contains descriptive fields and date information common to most document accounting lines.  The Event Type field in this section is protected as it defaults from the Header.  Various amount are displayed that will be used in the various Posting Lines created for the Accounting Line.

  • Fund Accounting: This tab contains the COA fields common to the section as found on other documents.

  • Detail Accounting: This tab contains the COA fields common to the section as found on other documents.

• Posting

  Lists the system-generated details used to recognize the financial impact of a specific accounting line.  If a fixed asset document has an accounting impact, the system uses the posting line information to update the fixed asset and general accounting journals and other accounting tables such as Balance Sheet Balance (BBAL).  The fields and sections on this page are like those of other documents with the addition of a section to provide the Fixed Asset Number and Component Number.

  For the external sale the FD document generates posting lines for depreciation, gain/ loss, reversal of accumulated depreciation and sales revenue being routed.

  For the internal sale the FD document generates posting lines for both the seller alone. The posting lines for depreciation, gain/ loss, reversal of accumulated depreciation and sales revenue being routed through the due from account are generated.

Tasks

• To create a FD document, go to Use the Fixed Asset Disposition (FD) Document.