You can set up an integration between Fixed assets and Accounts payable to automatically create fixed assets from purchase orders or invoices, or automatically post acquisition and acquisition adjustment transactions for fixed assets.
There are four available methods for integrating Fixed assets and Accounts payable, and you must use the same method for all fixed assets:
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You manually create a fixed asset before you add the fixed asset number to the line on the purchase order or invoice. An acquisition transaction automatically is posted for the asset when you post the invoice. This is the default method.
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You manually create a fixed asset before you add the fixed asset number to the line on the purchase order or invoice. No acquisition transaction is posted for the asset when you post the invoice.
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A new fixed asset automatically is created when you post a packing slip or invoice that has the check box selected. An acquisition transaction automatically is posted for the asset when you post the invoice.
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A new fixed asset automatically is created when you post a packing slip or invoice that has the check box selected. No acquisition transaction is posted for the asset when you post the invoice.
Select one of the first two methods if you prefer to manually create fixed assets, and then assign the fixed asset number to the purchase order or invoice. Select one of the last two methods if you prefer a more flexible approach: sometimes you might create fixed assets manually, and sometimes you might automatically create a new fixed asset based on the fixed asset information in the line item details.
Whether you manually create fixed assets or use a more flexible approach, the other decision is whether an acquisition transaction can only be posted in Fixed assets, or whether it can be posted when you post an invoice. Some organizations prefer that users manually create acquisition and acquisition transactions in Fixed assets by using manual journal entry or proposals.
This topic discusses the details of each method.
Methods that
use a manually created fixed asset
When you post an invoice that has a fixed asset number entered in the lines, if the check box in the form is selected, the acquisition is posted automatically, and the asset's status changes to .
If an acquisition cannot be posted, you can either manually enter an acquisition transaction in Fixed assets, or use an acquisition proposal in the journal to create multiple acquisition transactions at once.
Note
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If General ledger is set up to limit acquisition transaction posting to a specific user group, you must be a member of that user group to post acquisition transactions from invoices. |
Methods that
use an automatically created fixed asset
When you post a packing slip that has the check box selected for a line, a new fixed asset is created with a status of . Then, when you post an invoice with a new fixed asset, an acquisition transaction is posted for the new asset and the asset status changes to , if General ledger is set up to allow asset acquisitions from Accounts payable, and you are a member of a user group that can post acquisition transactions.
If the check box was not selected on the purchase line when you posted the packing slip, but it was selected when you posted the invoice, the new fixed asset is created and acquired with a status of , if General ledger is set up to allow creating and acquiring. An additional asset is not created when you post an invoice if one was already created when you posted the packing slip.
Capitalization threshold
When you use a method where the asset is automatically created and acquired, you can set up the system to verify whether the purchase amount of the fixed asset meets a specified capitalization threshold for asset depreciation. If so, the check box will be selected in the value model or depreciation books for the asset when it is created from Accounts payable.
A capitalization threshold is a dollar amount that determines whether assets are depreciated if they meet the specified amount. For example, if you purchase an asset and the purchase amount is less than the capitalization threshold, the asset is not designated to depreciate; if the purchase amount meets or exceeds the threshold, the asset is designated to depreciate.
You can set up the capitalization threshold in the form. For more information, see Fixed asset groups (form).
Scenario
The following scenario discusses a full cycle of a Fixed assets and Accounts payable integration. A sample setup is shown and the use of acquisition proposals also are described. For more information about setup, proposals, and posting accounts, see Set up Fixed assets and Accounts payable integration, Process assets created from Accounts payable, and Fixed assets integration.
In this scenario, the system is set up as follows:
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Assets are automatically created during packing slip or invoice posting, but General ledger is set up to prevent posting acquisition transactions from Accounts payable.
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Accounts are specified in the and fields in the form.
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The capitalization threshold for the Computers group is 1,500.
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Your job is to enter a purchase order for a new laptop that an employee will use, post the purchase order, verify that the shipping clerk posts a packing slip, post the invoice, and then verify that the accountant updates the laptop asset to a status of .
To begin, you use the form to enter details for the laptop, which costs 1,600. You select the check box in the purchase order lines, select COMP as the fixed asset group, and save the purchase order.
When the laptop is received, a shipping clerk enters and posts a packing slip to record the receipt of the laptop. The laptop asset is created with a status of . The amount exceeds the capitalization threshold, so the check box is selected in the value models and depreciation books for the laptop asset. The following transactions occurred.
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Transaction text |
Account |
Debit |
Credit |
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Purchase, Packing slip purchase |
Uninvoiced receipts |
1,600.00 |
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Purchase, Packing slip purchase offset |
Accrued purchases |
1,600.00 |
Next, you post the invoice for the laptop. The laptop status is not changed because General ledger is set up to prevent an asset acquisition transaction from being posted when an invoice is posted. The check box was selected when the invoice was posted, so the account was used. The account was not used because no acquisition was posted; it will be used later when your organization's accountant posts an acquisition transaction in Fixed assets using acquisition proposals.
The following transactions occurred.
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Transaction text |
Account |
Debit |
Credit |
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Purchase, Packing slip purchase offset |
Accrued purchases |
1,600.00 |
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Vendor balance |
Accounts payable |
1,600.00 |
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Purchase, Fixed asset receipt |
Computer expense |
1,600.00 |
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Purchase, Packing slip purchase |
Uninvoiced receipts |
1,600.00 |
Finally, the accountant reviews all fixed assets with a status of , so the new laptop asset is reviewed. The accountant then opens the form from the journal lines, and then creates acquisition transactions for all assets that have an invoice but still have a status of . When the journal is posted, the status of the laptop asset is changed to , and the account is credited while the Asset acquisition account is debited.
The following are variations for this scenario:
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If General ledger is set up to allow asset acquisition transactions to be posted when invoices are posted, the accountant does not need to use acquisition proposals in Fixed assets because the acquisition transaction is created. Also, different accounts are updated when you post the invoice. Instead of Computer expense, the Inventory account is debited, and two additional transactions occur: the Asset acquisition account is debited and the Inventory account is credited.
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If the check box is not selected when the packing slip is posted, no asset is created at that time. If you select the check box before you post the invoice, the asset is created with a status of , or a status of if you also post acquisition transactions when invoices are posted.
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If the laptop cost is 1,400 instead of 1,600, the capitalization threshold is not reached, so the asset is created with the check box cleared.
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If an invoice register is used, you use the form after the invoice register is posted to retrieve the voucher, link the purchase order to the invoice, select the check box, and then post the invoice. If you are a member of a user group that can create acquisition transactions, the acquisition is created and the asset has a status of .
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If only a partial quantity is received, no asset acquisition is created for the first invoice because of user group restrictions. The only way that an acquisition can be posted for the second invoice that completes the quantity ordered is if an acquisition transaction has already been entered for the first invoice, and you are a member of the user group that is allowed to post acquisitions.
