Periodically, you might be notified that the cost to replace or insure specific fixed assets has changed. For example, your manager might inform you that inflation was 3 percent last year, so you need to increase the replacement cost of all fixed assets by 3 percent.
Although you can edit the replacement cost and insured value for individual fixed assets in the form, you can use the periodic form to update these values for an entire group of assets at one time. The remainder of this topic provides information about how to update values for entire groups only.
How values are updated
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 and fields in the 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 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.
How to use a date to select which items to 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 button. The date criteria that you specify is compared to the date of the last periodic update for the asset (the field in the form). Each time you successfully update the replacement cost or insured value for a fixed asset, the system automatically updates the field with the current date.
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 field 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.
Cumulative effect of each update
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.
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.
For the Office Furniture group, type 4.25in the field and 0in the field.
For the Computers group, type –10in the field and –10in the field.
In the form, 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 and fields in the 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 and fields in the 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 form to recalculate the values based on the factors that you entered.
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.