Calculating Fixed Asset Value
PANTHEON
When fixed assets (FAs) are upgraded (value increases) or impaired (value decreases), their values must be recalculated to ensure accurate accounting. This recalculation can be performed directly in the Fixed a register, when it is not intended to affect the FAs useful life or its depreciation rate.
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Warning
Before using calculate, depreciation for the current month has too be calculated first. Revaluation is then entered for the last day of the month, for example 31. of July.
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Case summary
Tecta Plc. performed an upgrade on a new production sewing machine, increasing its value by €5,000, but not wanting the upgrade to affect its useful life and depreciation rate. To achieve that, the person responsible will calculate the adjustment to the FA value directly in the Fixed Assets register.
- Accessing the Value Tab
- Calculating Fixed Asset Value
- Posting the Revaluation
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The person responsible opens the Fixed Assets register by navigating to Financials | Fixed Assets | Fixed Assets.
The Fixed Assets register opens.
The person responsible uses the Toolbar features to navigate to the inventory number 00046, which had its value increased.
The person responsible clicks the Value tab of the 00046 sewing machine.
In the next step, the person responsible calculates the new FA value
The person responsible clicks on the last entry line.
After selecting the last entry line, indicated by a change in color, the person responsible presses the down arrow key on the keyboard to create a new entry line.
The person responsible clicks the arrow button in the Entry Type field and selects 3 - Upward reval. on acquisition accounts.
When the Entry Type has been selected, the person responsible right-clicks anywhere in the Value tab and selects Calculate.
A new window titled Calculate Fixed Asset Value opens.
The person responsible enters 5.000 in the Cost field, reflecting the cost of the sewing machine upgrade, and presses the Enter key on the keyboard to confirm the entry.
After pressing the Enter key, the program automatically calculates Accumulated Depreciation and Difference. The person responsible clicks the Confirm/Post button, to confirm the changes and post the revaluation at the same time.
In the next step, the person responsible confirms and posts the revaluation.
After clicking the Confirm/Post button, a new window titled Posting of Fixed Assets opens.
The person responsible selects:
- Fill in Doc.: Internal document,
- Fill in Linked Doc.: Linked document,
- Fill in Ext. Doc.: Linked document.
The person responsible then clicks the Posting button to complete the entry.
The General Ledger opens in a new window, displaying the journal entry for the upward revaluation posting.
The person successfully calculated and posted the revaluation of the sewing machine.