Introduction
Welcome to Empress’s Asset Capitalization. This feature is a powerful tool that allows you to manage and transform your assets in a way that best suits your business needs.
From converting stock items into new composite assets to capitalizing the cost of service expenses, Asset Capitalization offers a variety of ways to streamline your assets and optimize their value.
Accessing Asset Capitalization
To use this tool, navigate to:
Home > Assets > Maintenance > Asset Capitalization
Using Asset Capitalization
Now, let’s delve into four key applications of the Asset Capitalization feature:
1. Converting Stock Items into a New Composite Asset
Creating a new composite asset is made simple by following these steps:
- Start a New Asset Capitalization: Begin by creating a new asset capitalization entry.
- Choose the Capitalization Method: Select “Create a new composite asset”. Input the Target Item Code for the asset and the Target Asset Location for its physical location. If using a WIP composite asset, select “Choose a WIP composite asset” and set the Target Asset.
- Personalize Your Settings: You can adjust the Naming Series, Company, Finance Book, and Posting Date to fit your preferences.
- List Consumed Stock Items: Include the stock items that will be transformed into the new asset. If you chose a WIP composite asset, the items related to the asset will be automatically populated from Purchase Receipts/Invoices.
- Save and Submit: Once satisfied with your entry, save and submit it.
- Establish Depreciation: Set the depreciation details for the new asset, if applicable.
Upon completion, the value of the consumed stock items will be deducted from the chosen warehouses and credited to the Warehouse Stock Accounts. The Fixed Asset account of the new asset will then be debited by the Total Value.
2. Converting Stock items into a New Composite Asset and Capitalizing Service Expenses
This process is almost identical to the first, with the addition of Service Expenses which can be added and will be credited to the Expense Accounts.
3. Converting Assets into a New Composite Asset
Transforming existing assets into a new composite asset involves these steps:
- Prepare: Create a new fixed asset Item and ensure the ‘Is Fixed Asset’ checkbox is ticked.
- Start a New Asset Capitalization
- Input the Target Item Code
- Set the Target Asset Location
- Personalize Your Settings
- List Consumed Assets: Include the assets that will be transformed.
- Save and Submit
- Establish Depreciation
Upon completion, the consumed assets will be depreciated up to the posting date, and Depreciation Journal Entries will be automatically created. The assets will then be disposed of, their status changed to “Capitalized”, and their accounts updated accordingly.
4. Converting Assets into a New Stock Item
To convert one or more assets into a new stock item, follow these steps:
- Prepare: Create a new stock Item and ensure the ‘Maintain Stock’ checkbox is ticked.
- Start a New Asset Capitalization
- Change Entry Type to Decapitalization
- Input the Target Item Code
- Set the Target Warehouse and Target Quantity
- Personalize Your Settings
- List Consumed Assets
- Save and Submit
- Establish Depreciation
Upon completion, the consumed assets will be depreciated up to the posting date and their accounts updated. The new stock item will be added to the Target Warehouse, and the Target Warehouse Account will be debited by the Total Value.
Conclusion
Empress’s Asset Capitalization is a versatile tool that can greatly assist in managing your business assets. By offering a variety of asset transformation options, this feature gives you the power to optimize your asset management based on your unique business needs.
For further assistance or information, please refer to our non-technical resources or contact our support team.