Fixed Assets: To Create Fixed Asset Classes

In the following implementation activity, you will learn how to create fixed asset classes.

Story

Suppose that the fixed asset functionality has been configured for SweetLife Fruits & Jams. Before fixed asset records are created, fixed asset classes need to be planned and created. SweetLife needs to create and maintain fixed assets for land, buildings and building improvements, computers, and software. Each fixed asset class must have a particular fixed asset type assigned to it. The predefined asset types available in MYOB Acumatica cover the types of fixed assets used by SweetLife.

Acting as an implementation consultant, you need to create the following fixed asset classes in the system.

Asset Class Asset Type Tangible Depreciable Description Depreciation Method Averaging Convention Useful Life
LAND LAND Yes No Land None No 0 (indefinite)
BUILDING BUILDING Yes Yes Building and major building improvements SL (Straight-Line) Mid Period 39
COMPUTERS COMPUTERS Yes Yes Computers and computer accessories MACRS Mid Quarter 5
SOFTWARE SOFTWARE No Yes Software licensed with limited use time and website development SL (Straight-Line) Full Period 3

Process Overview

In this activity, on the Fixed Asset Classes (FA201000) form, you will create the needed fixed asset classes.

System Preparation

Before you start creating fixed asset classes, launch the MYOB Acumatica website, and sign in to a company with the U100 dataset preloaded. You should sign in as Kimberly Gibbs with the gibbs username and the 123 password.

As a prerequisite activity, in the company to which you are signed in, be sure you have prepared the system, as described in Fixed Assets: To Configure the System for Fixed Asset Management.

As a prerequisite activity, in the company to which you are signed in, be sure you have configured the fixed asset subledger, as described in Fixed Assets: To Configure the Fixed Asset Functionality.

Step: Creating Fixed Asset Classes

To create fixed asset classes, do the following:

  1. On the Fixed Asset Classes (FA201000) form, add a new record.
  2. Create the LAND fixed asset class as follows:
    1. In the Asset Class ID box, enter LAND.
    2. In the Description box, enter Land.
    3. Make sure that the Active check box is selected.
    4. On the General tab, select LAND in the Asset Type box.
    5. On the GL Accounts tab, specify the following settings:
      • Fixed Assets Account: 15100 (Land)

        This account will hold the cost of the fixed assets of the LAND class. This account will be debited when a fixed asset of the LAND class is created, and credited when a fixed asset of this class is disposed of.

      • Gain Account: 90000 (Gain/Loss of Fixed Asset Disposal)

        This account will keep the gain or loss resulting from the disposal of a fixed asset of this class. The account will be used for processing fixed asset disposals. When the fixed asset is disposed of, this account will be debited in the asset's cost amount and credited in the amount of the accumulated depreciation to record the net value of the asset. Also, this account will be credited in the proceeds amount. As a result, the gain or loss from the disposal of the fixed asset will be recorded to the account.

      • Loss Account: 90000 (Gain/Loss of Fixed Asset Disposal)
  3. On the form toolbar, click Save.
  4. On the form toolbar, click Add New Record, and create the BUILDING fixed asset class as follows:
    1. In the Asset Class ID box, enter BUILDING.
    2. In the Description box, enter Buildings and building improvements.
    3. Make sure that the Active check box is selected.
    4. On the General tab, select BUILDING in the Asset Type box.
    5. In the Useful Life, Years box, type 39.
    6. On the GL Accounts tab, specify the following settings:
      • Fixed Assets Account: 15200 (Buildings and Improvements)

        This account will hold the cost of the fixed assets of the BUILDING class. This account will be debited when a fixed asset of the BUILDING class is created, and credited when a fixed asset of this class is disposed of.

      • Accumulated Depreciation Account: 16200 (Accumulated Depreciation: Buildings and Improvements)

        This account will hold the accumulated depreciation for the fixed assets of the BUILDING class. This account will be credited when an asset of the BUILDING class is depreciated, and debited when a fixed asset of this class is disposed of.

      • Depreciation Expense Account: 64000 (Depreciation Expense)

        This account will accumulate depreciation expenses. The account will be used for recording depreciation expenses when assets are depreciated. This account will be debited when fixed assets are depreciated.

      • Gain Account: 90000 (Gain/Loss of Fixed Asset Disposal)
      • Loss Account: 90000 (Gain/Loss of Fixed Asset Disposal)
    7. On the Depreciation tab, specify the following settings for the FIN book:
      • Class Method: SL (Straight-Line)
      • Averaging Convention: Mid Period
  5. On the form toolbar, click Save.
  6. On the form toolbar, click Add New Record, and create the COMPUTERS asset class as follows:
    1. In the Asset Class ID box, enter COMPUTERS.
    2. In the Description box, enter Computers and accessories.
    3. Make sure that the Active check box is selected.
    4. On the General tab, select COMPUTERS in the Asset Type box.
    5. In the Useful Life, Years box, type 5.
    6. On the GL Accounts tab, specify the following settings:
      • Fixed Assets Account: 15300 (Computers)

        This account will hold the cost of the fixed assets of the COMPUTERS class. This account will be debited when a fixed asset of the COMPUTERS class is created, and credited when a fixed asset of this class is disposed of.

      • Accumulated Depreciation Account: 16300 (Accumulated Depreciation: Computers)

        This account will hold the accumulated depreciation for the COMPUTERS fixed assets. This account will be credited when an asset of the COMPUTERS class is depreciated, and debited when a fixed asset of this class is disposed of.

      • Depreciation Expense Account: 64000 (Depreciation Expense)
      • Gain Account: 90000 (Gain/Loss of Fixed Asset Disposal)
      • Loss Account: 90000 (Gain/Loss of Fixed Asset Disposal)
    7. On the Depreciation tab, specify the following settings for the FIN book:
      • Class Method: MACRS5-MQ
      • Averaging Convention: Mid Quarter
  7. On the form toolbar, click Save.
  8. On the form toolbar, click Add New Record, and create the SOFTWARE asset class as follows:
    1. In the Asset Class ID box, enter SOFTWARE.
    2. In the Description box, enter Software and website.
    3. Make sure that the Active check box is selected.
    4. On the General tab, select SOFTWARE in the Asset Type box.
    5. In the Useful Life, Years box, type 3.
    6. On the GL Accounts tab, specify the following settings:
      • Fixed Assets Account: 15400 (Software)

        This account will hold the cost of the fixed assets of the SOFTWARE class. This account will be debited when a fixed asset of the SOFTWARE class is created, and credited when the fixed asset of this class is disposed of.

      • Accumulated Depreciation Account: 16400 (Accumulated Depreciation: Software)

        This account will hold the accumulated depreciation for the SOFTWARE fixed assets. This account will be credited when an asset of the SOFTWARE class is depreciated, and debited when the fixed asset of this class is disposed of.

      • Depreciation Expense Account: 64000 (Depreciation Expense)
      • Gain Account: 90000 (Gain/Loss of Fixed Asset Disposal)
      • Loss Account: 90000 (Gain/Loss of Fixed Asset Disposal)
    7. On the Depreciation tab, specify the following settings for the FIN book:
      • Class Method: SL (Straight-Line)
      • Averaging Convention: Full Period
  9. On the form toolbar, click Save.