Create Asset Account Definition – A summary of the activity

Asset Account Rule Definition specifies the accounts that would be affected by the asset transactions, with respect to the asset class and the finance book of the assets involved in the transaction. This activity allows you to eliminate the need for mundane date entry of debit and credit account during transaction. The asset account rules are defined to default the accounts, based on the asset transactions and the assets involved. The asset account rule can be defined for the accounts in base currency of the login organization unit.

You can create the asset account definition for various usages. Usage indicates the nature of the account and the same usage can be called by different components. For example, if an asset account has been defined for a usage then both “Asset Capitalization” (during capitalization) and “Asset Disposal” (during retirement) business components can employ this usage whenever entries have to be posted to the asset account. The various usages available are “Capitalization Asset”, “Depreciation”, “Cumulative Depreciation”, "Capital WIP", "Revaluation Asset", "Revaluation Reserve", "Loss on Revaluation“, ”Revalued Depreciation” and “Revalued Cumulative Depreciation”. You can also view the asset accounts defined in this activity.

The system updates the status of the asset class to “Active” on creation and stores the login ID of the user and the system date along.

Example

To default the account involved in “Depreciation” of computers for the finance book “FB-01”.

• Create an asset class “Computers” in the “Asset Information” business component.

• Create accounts “Depreciation-Comp” of account type “Expenditure” and “Cumulative Depreciation-Comp” of account type “Liability”.

• Create an account rule for “Computers” selecting “FB-01” as finance book as below

Whenever the assets attached to the class “Computers “ are depreciated in finance book “FB-01”, the entry will be

Cr Cumulative Depreciation-Comp                         Dr Depreciation-Comp.

This entry will be automatically posted in the finance book through account rule definition.

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