To recalculate replacement costs and insured values for fixed assets, you must first specify the percentage by which to change the existing replacement costs and insured values, and then perform the periodic update to actually recalculate the values. You specify the percentage in the Replacement cost factorand Insured value factorfields in the Fixed asset groups form.

Although you specify these factors for the entire fixed asset group, when you use the periodic form, you can select to recalculate the replacement cost and insured value for only specific fixed assets within a group.

When you use the periodic form to recalculate the replacement cost and insured value for the assets, the system uses the following formulas:

• [(Asset group's replacement cost factor / 100) + 1] * Asset's existing replacement cost

• [(Asset group's insured value factor / 100) + 1] * Asset's existing insured value

When you use the periodic update, both the replacement cost and insured value are updated for the selected assets; you cannot specify that only one value be updated. To leave one value the same while you update the other value, enter 0(zero) as the factor in the Fixed asset groups form. A zero or blank factor causes the calculation to be skipped in the periodic update.

The book value and net book value of fixed assets are not affected by the periodic update.

By default, the periodic process updates the selected assets that have not been updated on the current day, but that might have been updated on previous days (for example, < current datemeans "before today"). You can change the date in the periodic form by using the Selectbutton. The date criteria that you specify is compared to the date of the last periodic update for the asset (the Last periodic value/cost updatefield in the Fixed assets form). Each time you successfully update the replacement cost or insured value for a fixed asset, the system automatically updates the Last periodic value/cost updatefield with the current date.

Example

You updated the replacement cost of the Vehicles, Office Furniture, and Buildings groups by 5 percent yesterday, and you now consider these assets to be accurately updated. To exclude these assets when you update all other fixed assets today, you enter a date in the Last periodic value/cost updatefield that is before yesterday ( < yesterday's date) because the last periodic update for the vehicles, office furniture, and buildings occurred outside of the date criteria you entered.

Each periodic update has a cumulative effect, so you should plan your updates carefully. For example, if you increase all assets by 3 percent on Tuesday and then increase office furniture by 4 percent on Friday, be sure that you intend for office furniture to increase by a total of 7.12 percent.

Scenario

Your manager notifies you of the following changes to fixed assets:

• Increase the replacement cost of all fixed assets, except computers, by 3.25 percent.

• Increase the replacement cost of all office furniture by an additional 1 percent.

• Decrease the replacement cost and insured value of all computers by 10 percent.

In the Fixed asset groups form, for all fixed asset groups except the Office Furniture group and Computers group, type 3.25in the Replacement cost factorfield and 0in the Insured value factorfield.

For the Office Furniture group, type 4.25in the Replacement cost factorfield and 0in the Insured value factorfield.

For the Computers group, type –10in the Replacement cost factorfield and –10in the Insured value factorfield.

In the Update replacement costs and insured valuesform, click OKto perform the recalculation for all fixed assets.

The next day, your manager informs you that computers decreased 8 percent instead of 10 percent, so you need to correct the replacement costs and insured values. To fix the error, you can use either of two methods:

• Manually edit the Insured valueand Replacement costfields in the Fixed assets form for each fixed asset in the Computers fixed asset group. Calculate and manually enter the values as if you had decreased the original amount by 8 percent. With this method, you do not use the periodic form.

• Enter replacement cost and insured value factors for the Computers group in the Replacement cost factorand Insured value factorfields in the Fixed asset groups form. This will both reset the assets back to their original value (before the 10 percent decrease) and apply the 8 percent decrease to the original value. Then use the Update replacement costs and insured valuesform to recalculate the values based on the factors that you entered.

  Note
  You cannot reverse the –10 factor by entering a factor of positive 10 (or a factor of 2, the difference between –10 and –8), because the amounts will not be calculated as you intend.