fixed assets

What is the primary purpose of the Fixed Assets solution in SAP Business One?

To manage and monitor the value of assets throughout their useful life, from acquisition through depreciation to retirement.

How do you enable the Fixed Assets solution in SAP Business One?

Navigate to Administration > System Initialization > Company Details > Basic Initialization and check the Enable Fixed Assets checkbox.

Can the Fixed Assets solution be deactivated once enabled?

No, once the Enable Fixed Assets checkbox is checked, the solution cannot be deactivated.

What is the difference between Asset Master Data and Item Master Data?

Asset Master Data is specifically for fixed assets with a Fixed Assets tab and item type, while Item Master Data is for inventory items. They are separate entities with different authorization controls.

What are the five key phases in the life cycle of a fixed asset in SAP Business One?

Definition, Activation, Depreciation, Adjustments, and Retirement.

What is a Virtual Fixed Asset?

A template item that allows the company to purchase identical fixed assets in large quantities, automatically creating the same quantity of asset master data records upon capitalization.

What is the prerequisite for using Virtual Fixed Assets?

The Virtual Item checkbox is available only if you use numbering series for the asset master data.

Can Virtual Fixed Assets be capitalized through any document?

No, virtual items can be capitalized by A/P invoices only.

What happens when you enter a quantity for a virtual item in an A/P Invoice?

SAP Business One automatically creates the same quantity of asset master data records and capitalizes them.

Can you mix virtual fixed assets and normal fixed assets in the same A/P invoice?

No, you can include multiple virtual fixed assets in the same A/P invoice, but you cannot mix virtual and normal fixed assets.

What is the purpose of the Enforce Serial Numbers option for virtual assets?

When selected, you must specify a serial number for each generated asset when purchasing assets using virtual items in A/P invoices.

Are asset serial numbers the same as inventory serial numbers?

No, asset serial numbers are saved in the asset master data for tracking purposes and are not regular inventory serial numbers, as fixed assets cannot be defined as inventory items.

How do you view serial numbers assigned to virtual assets after purchase?

Right-click the created A/P invoice and view the serial numbers, or check the asset master data where the serial number is tracked.

Do virtual fixed assets have monetary values in their master data?

No, the virtual item functions as a template and does not have values under the Fixed Assets tab. The created assets are regular fixed assets with monetary values.

What is useful life in the context of fixed assets?

The period during which an asset is expected to be usable for the purpose for which it was acquired, after which it should be written off completely.

What is capitalization in fixed asset management?

The process of recording the acquisition and production cost as a fixed asset.

What is the Asset Value Date?

The date that sets the Capitalization Date in the Asset Master Data, by default the same as the A/P Invoice posting date but can be changed before adding the invoice.

What is depreciation in fixed assets?

The reduction in the book value of an asset over its useful life for both tax and accounting purposes, included in company expenses.

What is Net Book Value?

The calculated value of an asset using the historical cost minus any accumulated depreciation.

What is retirement in fixed asset management?

The removal of an asset or part of an asset from the asset portfolio, setting its value to zero in the asset balance sheet account.

What are the two ways to retire a fixed asset?

By A/R invoice if selling the asset, or by a Retirement document if no customer is involved and you need to write off the asset.

What must you do to retire an asset using an A/R invoice?

Mark the Asset Master Data record as a Sales Item.

What is the Asset Class definition?

The main definition in Asset Master Data that includes the association to other definitions: Depreciation Area, Account Determination, and Depreciation Type.

What is a Depreciation Area?

A financial dimension showing the valuation of the asset for a given purpose, such as book depreciation, tax depreciation, or depreciation for cost accounting.

How many depreciation areas must be defined as the main area?

One depreciation area must be defined as the main area in the company.

What is Account Determination in fixed assets?

A definition that enables the system to automatically select the relevant G/L accounts for assets accounting.

What is a Depreciation Type?

A classification of depreciation based on the reason for value adjustment, including the method for value calculation.

What are the main steps to start working with Fixed Assets?

Activate the solution, configure definitions for each asset type, define document numbering, define Asset Master Data records, and attach relevant definitions to each asset.

What happens when an A/P Invoice includes a fixed asset?

The A/P Invoice automatically generates a Capitalization document and activates the Asset Master Data.

What document flow occurs during asset acquisition with a vendor?

A/P Invoice debits Vendor and credits Acquisition Clearing Account; Capitalization document debits Acquisition Clearing Account and credits Asset Balance Sheet Account.

Can multiple depreciation areas be defined for an asset class?

Yes, you can define a main area and additional areas like GAAP as main and IFRS as additional.

What is the difference between posting and non-posting depreciation areas?

Posting to G/L areas post transactions to the system and fixed assets sub-ledger, while additional areas can be used for reports without posting to the general ledger.

What sub-tabs are available in the Asset Master Data window?

Overview, Values, Depreciation, Cost Accounting, and Attributes.

Where do you access the Fixed Assets setup definitions?

Administration > Setup > Financials > Fixed Assets.

What is the Calculate Depreciation By setting?

A global company-level setting that specifies whether depreciation is calculated by month or day.

Can you change the Calculate Depreciation By setting during a fiscal year?

No, you cannot change it during a fiscal year if a depreciation transaction was already posted. You can change it at the next fiscal year.

What is the default selection for Calculate Depreciation By?

Month.

How is monthly depreciation calculated using the straight-line method?

Acquisition cost divided by useful life in months equals depreciation per month. For example, 6000 / 12 months = 500 per month.

How is daily depreciation calculated?

Acquisition cost divided by 365 days equals depreciation per day. For example, 6000 / 365 = 16.44 per day, then multiply by days in the month.

What are the three types of Depreciation Area?

Posting to G/L, Additional Area, and Derived Area.

What is the purpose of a Derived Area?

A reference to the main depreciation area where value differences are kept, mostly used to keep unplanned depreciation values separate from the main area.

What is the default Depreciation Area type?

Additional Area.

What does Posting to G/L mean for a depreciation area?

This area will post transactions to the assets sub-ledger and the general ledger.

Can you change the depreciation area type after assignment?

No, you cannot change the depreciation area type if the area was assigned to an asset class.

What is the Main Depreciation Area field used for?

To define one depreciation area as the main area in the company that will post transactions to the system.

What are the two posting methods for depreciation?

Direct Posting and Indirect Posting.

What is Direct Posting for depreciation?

The system posts depreciation directly to the asset balance sheet account specified for the asset.

What is Indirect Posting for depreciation?

The system uses the accumulated depreciation account to post depreciation, and the asset balance sheet account is affected only when purchased or retired.

What are the retirement posting options?

Gross and Net, which apply to Retirement documents of scrapping type, determining which default expense account is used.

What depreciation methods are available in SAP Business One?

No Depreciation, Straight Line, Straight Line Period Control, Declining Balance, Multilevel, Immediate Write-Off, Special Depreciation, and Manual Depreciation.

What is the most common depreciation method?

Straight Line method.

What is the Calculation Base in Depreciation Type?

A setting that determines whether depreciation is calculated Yearly or Monthly, with Yearly being the default.

What are the three calculation methods for Straight Line depreciation?

Acquisition Value / Total Useful Life, Percentage of Acquisition Value, and Net Book Value / Remaining Life.

How does the Declining Balance method work?

It involves higher depreciation charges at the beginning of useful life with gradually decreasing charges, calculated using a constant percentage rate.

What controls the upper limit in Declining Balance depreciation?

The Factor field controls the upper limit calculated using the straight-line method multiplied by this factor.

What is the Automatically Change To field in Declining Balance?

It defines that the declining balance method will automatically switch to a different depreciation type, typically straight line, towards the end of useful life.

What is the Multilevel depreciation method?

A method that views useful life as several phases, depreciating the asset by a defined rate in each phase, supporting up to five levels.

How many levels must be defined for Multilevel depreciation?

At least one level must be defined.

What is a Low Value Asset?

An asset for which the acquisition and production costs do not exceed a legally predefined amount and can typically be written off within the acquisition period.

What fields appear when you select Low Value Asset?

Value Limit From and Value Limit To fields, enabling entry of minimal and maximal values allowed by national laws.

What is the purpose of the Useful Life field in Asset Class?

To enter the period in months during which the asset type is expected to be usable for its purpose.

What is the Status field in Asset Master Data?

An automatically updated field with three system statuses: New (not capitalized), Active (capitalized and depreciation started), and Inactive (retired).

When does the Status change to Active?

When the asset is capitalized and the depreciation process starts.

What is the Capitalization Date field?

The date on which the asset is capitalized, which can be manually specified or automatically filled when capitalizing via Capitalization document or A/P Invoice.

Can you change the Useful Life and Depreciation Type after attaching an Asset Class?

Yes, the user can change the Useful Life and Depreciation Type of the asset after attaching the Asset Class.

What is the Period Control pushbutton used for?

To define specific depreciation calculation factors for different periods, enabled only for Straight Line Period Control method with Individual or Individual Usage period.

What triggers the activation of an Asset Master Data record?

Purchasing a fixed asset using an A/P Invoice or creating a Capitalization document directly.

What document is automatically generated when you add an A/P Invoice with a fixed asset?

A Capitalization document.

Can the Asset Value Date differ from the posting date?

Yes, it can differ but must be within the same period as the posting date.

What accounts are involved in the A/P Invoice journal entry for fixed assets?

Debit Vendor account and Credit Acquisition Clearing Account.

What accounts are involved in the Capitalization document journal entry?

Debit Acquisition Clearing Account and Credit Asset Balance Sheet Account.

What happens if a vendor is not involved in capitalization?

Generate a Capitalization document directly; only the capitalization journal entry is created, and the clearing account appears as an obligation in the Balance Sheet.

Where can you create a new Asset Master Data from within an A/P Invoice?

Enable Allow Creating Fixed Assets in Marketing Documents in Administration > Setup > General > User Defaults > Defaults tab.

How do you execute a Depreciation Run?

Navigate to Financials > Fixed Assets > Depreciation Run and choose the Preview button.

What does the Depreciation Run do?

It carries out all planned depreciations up to a specified date and posts them to the system.

Can you execute multiple Depreciation Runs for the same period?

Yes, but a repeat run only posts value differences from the last depreciation run.

What method does Depreciation Run use for un-posted planned depreciation?

The catch-up method, gathering all un-posted planned depreciation for the entire period and creating a collective posting.

Can a Depreciation Run be executed for earlier periods than already executed runs?

No, the current depreciation run cannot be earlier than any runs already executed for the selected depreciation area.

How are financial postings grouped in the Depreciation Run?

By asset class.

What journal entry is created by Depreciation Run in Direct Posting?

Debit Depreciation Expense Account and Credit Asset Balance Sheet Account.

What journal entry is created by Depreciation Run in Indirect Posting?

Debit Depreciation Expense Account and Credit Accumulated Depreciation Account.

Can you split the asset balance sheet account by assets in the journal entry?

Yes, define the split in Administration > System Initialization > Document Settings > Per Document > Depreciation Run.

What status appears for Additional Area depreciation runs?

No Depreciation Posted, as Additional Areas do not post journal entries but can be used for reports.

Where does the Net Book Value appear on the Balance Sheet with Direct Posting?

In the account balance of the Fixed Asset Account.

Where does the Net Book Value appear on the Balance Sheet with Indirect Posting?

In the sub-total display showing Fixed Asset Account minus Accumulated Depreciation Account.

What are the three adjustment documents available during asset life cycle?

Transfer, Manual Depreciation, and Asset Revaluation.

What is the Transfer document used for?

To transfer an asset or part of an asset to a different asset or asset class.

What are the two transaction types in the Transfer document?

Asset Transfer and Asset Class Transfer.

When would you use Manual Depreciation?

For unexpected permanent value reduction, partial special depreciations, unit-of-production depreciation, or to appreciate an asset to reverse unplanned depreciation.

What are the four document types in Manual Depreciation?

Ordinary Depreciation, Unplanned Depreciation, Appreciation, and Special Depreciation.

What is the purpose of Asset Revaluation?

To write an increase or decrease in the book value of an asset to reflect its current fair market value.

Must Asset Revaluation be verified with the client accountant?

Yes, you need to verify if this document is allowed in your localization.

What is the purpose of Fiscal Year Change?

To transfer all asset depreciations and balances from the current fiscal year to the new fiscal year and recalculate planned depreciation.

When must you execute a Fiscal Year Change?

When a fiscal year ends in fixed asset management.

What happens if the next fiscal year is not yet defined?

You receive an error message when attempting the fiscal year change.

What are the two retirement methods for fixed assets?

A/R Invoice for selling the asset, or Retirement document for scrapping without a customer.

What happens to the asset after full retirement?

Its value in the asset balance sheet account is zero, status changes to Inactive, and Net Book Value is set to zero.

Can you perform a partial retirement?

Yes, in the Retirement document there is an option for partial retirement, where the asset holds the remaining value until the end of useful life.

What report displays all posted asset transactions in a fiscal year?

Asset History Sheet.

Where can you view the planned depreciation forecast?

In the Asset Depreciation Forecast Report or the Depreciation sub-tab of the Asset Master Data.