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Best Practice to Convert Multiple Purchases over to Single Fixed Asset.

patrickcolgan94
Freshman I
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What is the best method to Convert Multiple Purchases over to Single Fixed Asset.

A customer buys multiple laptops (Qty 8, similar Class, similar useful life) each at $1,000 on different dates or the same date.  What is the best method to convert to an Asset.

Fixed Asset thresh hold to capitalize is $5,000.

  • Do you setup an Asset with zero value and convert the 8 purchases as components to one Fixed Asset?
  • Or would you setup an Asset with summary amount of $8,000 and then convert purchases as components to this Asset #?   
  • Or do you setup a Parent Asset then add each converted purchase line amount to an Asset associated with the Parent Asset?

 

 

Best answer by KristenSchneider

I’m sure there are differing opinions on this, but I would create a parent asset, and convert the purchased laptops as component assets to the parent. 

If you add both the parent and the component assets with values, then you will double up your depreciation so create the parent asset as $0 and add each each laptop with its specific value.

This way, the component assets will depreciate individually based on the dates that they were added (not the date the parent was added), and the value of each laptop (in case some are ever purchased at different cost) and you can continue to add components to the parent asset as long as needed.

Example:  2 computers added in January at $1000 each with a 12-month life could start depreciation in January and finish in December calculated based on $1000, while 3 computers added in February at $2000 each could start depreciation in February and finish in the following January calculated based on $2000, etc.

 

 

 

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    parita
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7 replies

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Freshman I
  • jkobbeman
  • Freshman I
  • 2 replies
  • March 11, 2022

Following. We have the same question.  Hoping this will help to generate a response. 

K
Jr Varsity I
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I’m sure there are differing opinions on this, but I would create a parent asset, and convert the purchased laptops as component assets to the parent. 

If you add both the parent and the component assets with values, then you will double up your depreciation so create the parent asset as $0 and add each each laptop with its specific value.

This way, the component assets will depreciate individually based on the dates that they were added (not the date the parent was added), and the value of each laptop (in case some are ever purchased at different cost) and you can continue to add components to the parent asset as long as needed.

Example:  2 computers added in January at $1000 each with a 12-month life could start depreciation in January and finish in December calculated based on $1000, while 3 computers added in February at $2000 each could start depreciation in February and finish in the following January calculated based on $2000, etc.

 

 

 

L
Chris Hackett
J
3 people like this
  • L
    LukeSepe
  • Chris Hackett
    Chris Hackett
  • J
    jkobbeman
J
Freshman I
  • jkobbeman
  • Freshman I
  • 2 replies
  • March 20, 2022

Thanks Kristin.  

L
Freshman I
  • LukeSepe
  • Freshman I
  • 7 replies
  • April 28, 2022

I really appreciate this out of the box ideas on this.

My understanding based on what I read in the documentation is that establishing the parent child relationship between assets does not cause the system to look at them as 1 asset and doing something to the parent has no impact on the child. At the end of the day they are all still independent assets.

If I purchase a new truck for $40,000 and decide to get a utility bed added for $5000 and a couple of tools (such as a tool box and air compressor) mounted to the utility bed for another $5000 which is work performed by separate vendors, different POs, then my 1x $50,000 asset is actually multiple assets in the system that are all depreciated separately and have their own book value. While I suppose the parent child relationship can help organize this somewhat, if we can assume in this example that the goal was to have 1 asset to manage then I think the only way I know to really fix this problem is to basically start from zero with a new asset.

Just my 2cents.

Chris Hackett
1 person likes this
  • Chris Hackett
    Chris Hackett
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Freshman I
  • jjennings
  • Freshman I
  • 1 reply
  • May 20, 2022

How do you create a parent asset and then move those multiple purchases into the parent once it is created?  I have created a parent asset on the FA module, but don’t see where I can import my multiple purchases into that asset.  I am on the “Convert Purchases to Fixed Assets” page under Fixed Assets and I see where I can select and process, but when I try that, I end up making multiple fixed assets.  

L
Freshman II
  • lwaller20
  • Freshman II
  • 2 replies
  • July 11, 2022

I created a new asset and reconciled it to multiple purchases on the reconciliation tab of the asset. This was not possible in the convert purchases to assets form. 

Chris Hackett
1 person likes this
  • Chris Hackett
    Chris Hackett
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Freshman I
  • dmeseth
  • Freshman I
  • 3 replies
  • February 26, 2024

Is there a method to create a Master Asset Under Construction to contain multiple purchases within, and have the ability to break down the Asset into Sub Assets(that may contain multiple purchases) once the project is complete?  

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