Fixed Asset Internal Sale (FS)

Purpose

When the financial impact of a Capital asset needs to be transferred between funds, Advantage Fixed Assets provides a one-document (FS) and two-document (FD and FA) process to dispose or eliminate the owning fund’s financial participation, and transfer the asset/equity balance (net of accumulated depreciation) to a new, acquiring fund.

The FS will be entered and processed by the Buyer.  All fields which pertain to the “Seller” should be agreed upon prior to document entry.  The one-document approach allows a buyer to record the internal sale of a fixed assets using only one document, the Fixed Asset Internal Sale (FS) document.  The Fixed Asset Internal Sale (FS) document allows you to sell an asset internally and retain the asset number associated with the internally sold asset while still performing all of the updates made using the two document approach. This would simplify the process of performing audit trail of an asset.

The one document approach can be used only when:

• Each Component has only one Accounting line OR

• If the Component has more than one accounting line, then all of the accounting lines should be marked to post to the "Responsibility Center".

The FS Document requires that the entire asset must be internally sold and partial sales are not allowed (e.g. selling 1 component of a 4 component asset). Any change to the selling price for assets sold using the FS document is not allowed through the FP document. This is because the seller disposition details are not stored on the FA Registry tables. Buyer should process FI (Increase / Decrease) document to record the change in Selling price change and the Seller record the change in selling price through JV.

The FS document has four sections found on the secondary navigation panel.  Each is broken down into various subsections that contain groups of related fields.  Details on the individual fields can be found in the individual field help files for each field.  Many fields are not editable on this document either because of edits or the fields are protected.  All other fields are completed with the Auto Apply.  The Auto Apply functionality is required for the FS and is only available at the Header.  This is because in the one document model the entire asset (all the components and all of the components units) must be sold, partial sales are not allowed.  Auto Apply is the only way to load component and accounting lines to the FS document.

Auto Apply uses the Fixed Asset Number entered in the General Information section to apply information specific to the seller and to create the correct number of component and accounting lines in the document.  All information that is brought into the document as a result of Auto Apply comes from the Fixed Asset Registry tables.  Header information comes from FARHDR, component information comes from FARCOMP and accounting line information comes from FARACTG.

The following main events occur when processing a FA internal sale document:

• FS document generates the posting lines for the buyer as well as seller. It also calculates the depreciation and Gain / Loss on sale for the seller. The document generates the seller posting lines using the values from the FAR Header RC elements / Accounting line COA elements and buyer posting lines from the document header RC elements / accounting lines.

• On the FS document, only disposition related fields can be entered and no other changes are allowed. To record any other changes, the buyer should process FM document subsequently.

• The FAR header is updated with the buyer responsibility center COA elements, accumulated depreciation, and the net book value. If it is a composite asset the depreciation method and acquisition date are also updated.

• The FAR component is updated for the accumulated depreciation, component net book value, last depreciation date is set to null, depreciation method and acquisition date.

• The FAR accounting is updated for the accumulated depreciation, net book value, historical cost, selling price is set to null and the COA elements are updated

• If active records exist on the Depreciation elements changes table then such records would be deactivated.

• One record with the buyer details and another record with the seller details are inserted to the FA component journal.

• Records are inserted to the FA accounting Journal.

Structure

The following provides an overview of each section on the FS document.  For more information, refer to field level help.

• 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 section 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 section 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.

  • Seller Responsibility Center: This section contains Chart of Account (COA) fields defined as being responsible for the asset as well as the Custodian.  Auto Apply infers all COA elements from the Responsibility Center fields on the Fixed Asset Registry Header (FARHDR) table.  The COA elements are protected.  These fields are not posted to the Registry Tables when the document is finalized.

  

  • Buyer Responsibility Center:  This section contains Chart of Account (COA) fields defined as being responsible for the asset as well as the Custodian.  The user can enter the COA fields that represent the buyer’s Responsibility Center information. All COA fields are validated using the Fiscal Year in the General Information Section using common system validations.. The FARHDR would be updated with the values on the Buyer Responsibility Center COA element values.   Any field that is present on FARHDR and not entered, left blank, on the FS for the Buyer will remain on FARHDR and as part of the RC Posting for the Buyer.

  

  • Composite Asset Information: All of the fields displayed in this section represent the information applicable to the buyer.  The Composite Asset Indicator is inferred from the Fixed Asset Registry Header (FARHDR) table and is protected.  If the Composite Asset Indicator is False then none of the other fields in this section will be inferred or allowed for manual entry.  All of this information must be entered at the component level for non composite assets.

  If the Composite Asset Indicator is True then all applicable component information must be entered here and pushed down to the component line

  The Useful Life for the buyer will be calculated; however, it can be overwritten.  .

  The useful life will be calculated as follows: The Seller’s Disposition Date less the earlier of the Seller’s Acquisition or In Service Date.  This will result in number of days.  The number of days will be converted into years and then subtracted from the useful life of the Seller’s asset.  The result will be rounded down to the nearest integer and will become the Useful Life for the Buyer.

  There is a possibility that the Useful Life of the asset may be depreciated over a slightly shorter period than had it not been sold; therefore, you can manually update the Useful Life.  In the event that the Useful Life entered on the document is larger than the remaining Useful Life of the seller’s asset a configurable error message is issued.

  • Disposition Information: This section contains fields that control disposition postings and collects information for reporting purposes.  The information in this section represents the seller’s information and is not posted back to the Fixed Asset Registry tables when the FS is finalized.

  Information entered in this section for non composite assets will only be pushed down to the component level if the fields are left blank on the Component line.  Information for composite assets must be entered at the Header and will be pushed down to the component line and overwrite any information entered at that level.

  The Selling Price if entered represents the total selling price of the asset.  It can only be entered at the Header if the Net Book Value (NBV) is not zero. If entered it is prorated at the ratio of the NBV of the accounting line to component, and pushed down to the component and accounting lines.

  Depreciation Amount if entered represents the manual depreciation of the asset.  It can only be entered if the Seller Depreciation Method is Manual and NBV is greater than the salvage value of the asset.  If entered it is prorated at the ratio of the NBV of the accounting line to component, and pushed down to the component and accounting lines.

  

  • Fixed Asset Intent Reference: This tab displays the Fixed Asset Intent (FN) referenced document information fields of Document Code, Document Department and Document ID.

  • Document Information: This section 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

  This section lists specific attributes of each asset component.  The Insert New Line, Insert Copied Line and Remove Line functionality are disabled.  The only way to create component lines is by clicking on the Auto Apply function at the Header level.

  • Component General Information: All information is auto applied from FARCOMP.  Extended Description is inferred from FARCOMP and can be updated. The Asset System Number and Asset System Description are inferred from the FA document when Auto Apply is used.

  • Acquisition Details: This section contains fields to capture acquisition details.  All fields in this section are applicable to the buyer only.  The Acquisition Date, Acquisition Method, and Purchasing Authority fields in this section will overlay the seller’s acquisition information on the FARCOMP table when the document is finalized.

  • Component Location Details: This section 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.  Additional fields exist for this document to record any inventory taken for the component for reporting purposes and for updates to the Infrastructure Maintenance table.

  The Location, Sub Location and Complex/Building fields are auto applied. The New Location, New Sub Location and New Complex/Building should be manually updated.  If the buyer does not want to retain the Sub Location or Building/Complex information from FARCOMP, BLNK can be entered in the New Sub Location and New Building/Complex fields.  The New Location and New Sub Location are always validated against the Buyer Responsibility Center Department.

  • Component Classification: This section 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. Component Classification is required and must be either Adjusted or Contributed.  The In Service Date if entered cannot be earlier than the Disposition Date.

  The calculation of Useful Life will only occur if the asset is non composite. Composite Assets Useful Life is calculated at the Header and pushed down to the component level:

  The useful life will be calculated as follows: The Seller’s Disposition Date less the earlier of the Seller’s Acquisition or In Service Date.  This will result in number of days.  The number of days will be converted into years and then subtracted from the useful life of the Seller’s asset.  The result will be rounded down to the nearest integer and will become the Useful Life for the Buyer.  However the user can overwrite the calculated useful life.

  *There is a possibility that the Useful Life of the asset may be depreciated over a slightly shorter period than had it not been sold; therefore, you can manually update the Useful Life.  In the event that the Useful Life entered on the document is larger than the remaining Useful Life of the seller’s asset a configurable error message is issued.

  • Asset, Cost, Valuation, & Depreciation: This section contains several information fields for reporting needs, additional fields to control depreciation, and amount fields to display an amount for the component prior to and after closing costs are accounted for.  The fields in this section apply to the buyer and are posted back to the registry table when the document is finalized.

  • Disposition Details: All of the information in this section is applicable only to the seller and is used to update the journal tables but will not be reflected on the registry tables when the document is finalized.  These fields are blanked out on the Fixed Asset Component Registry table (FARCOMP) when the FS is finalized.  This section 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. Accumulated Depreciation Amount is inferred from FARCOMP and is protected. Gain/Loss Amount for the seller is calculated for the component based on the Selling Price and NBV.

  

  • Fixed Asset Intent Reference: This tab displays the Fixed Asset Intent (FN) referenced document information fields of Document Code, Document Department and Document ID.

• Accounting

  This section lists the Chart of Account (COA) details for how each asset component was funded.  The Insert New Line, Insert Copied Line and Remove Line functionality are disabled.  The only way to create accounting lines is by clicking on the Auto Apply function at the Header level.

  • General Information: This section 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 amounts are displayed that will be used in the various Posting Lines created for the Accounting Line. The line amount represents the selling price of the component. Internal Sale Gains/Losses are calculated using the seller Net Book Value (NBV) and the Line Amount. The Depreciation Amount is pushed down from the Component and this is a prorated depreciation amount. The Responsibility Center Posting Flag is auto applied.  If the value from FARACTG is true the value cannot be changed.

  • Fixed Asset Intent Reference: This tab displays the Fixed Asset Intent (FN) referenced document information fields of Document Code, Document Department and Document ID.

  • Fund Accounting: This section contains the COA fields’ common to the section as found on other documents.  The COA elements are not auto applied or inferred from FARACTG.  Users should manually enter the buyers COA elements, select an Accounting Template, and/or select the Responsibility Center posting indicator in the General Information section utilizing the RC fields on the document Header.  All COA elements are subject to common COA edits and validations as well as any applicable event type requirements.

  • Detail Accounting: This section contains the COA fields common to the section as found on other documents.  These COA elements are not auto applied or inferred from FARACTG.  Users can manually enter the buyer’s detailed accounting information, select an Accounting Template, and/or select the Responsibility Center Indicator in the General Information section.  Major Program is inferred based on Program, when entered, and protected.  It may also be required based on the Requirements table.  All other COA elements are subject to common COA edits and validations as well as any applicable event type requirements.

• 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.  Please refer to the CGI Advantage Financial - General Accounting User Guide for more information on posting.

  The FS document generates posting lines for both the seller and buyer. For the seller posting lines for depreciation, gain/ loss, reversal of accumulated depreciation and sales revenue being routed through the due from account are generated. For the buyer the posting lines for the purchase of the asset being routed through the due to account is generated.

Tasks

• To create a Fixed Asset Internal Sale (FS) document, go to Selling Fixed assets Internally: One-Document Approach (FS).