Asset Capitalization - An overview

Introduction

Asset capitalization refers to the process by which an asset is created and brought into the books of accounts of a company. It also involves capturing additional details relating to the asset such as  the manufacturer, custodian, and model.

Assets that are under construction can also be maintained and accounted. On the date of completion, these WIP assets can be capitalized as fixed asset.

Expenses incidental to the procurement of an asset can be capitalized using a capital journal.

The assets are capitalized and are assigned an identification number and other associated details like in-service date, location, cost center, etc. The asset comes into existence at this stage. Capitalization is the first major function of an asset that forms the basis for its other downstream functions like depreciation, insurance, revaluation, etc.

Feature Highlights

• Supports both planned and unplanned acquisition of assets (With & Without Proposal Generation).

• Supports capitalization of asset in both integrated and disintegrated environment. Integration refers to POMS, Goods Receipt, Invoice Component & EAM. Acquisition through Lease & Hire Purchase is not supported.

• Supports creation of bulk assets and bifurcation of tags

• Facilitates capitalization of multiple assets from a single invoice & capitalization of single asset from multiple invoices.

• Facilitates capitalization of other expenses incidental to capitalization.

• Facilitates capturing of asset in service date at tag level.

• Supports conversion of WIP to capital asset and reversal of capitalized asset.

List of Activities