Set up capital assets
Capital assets are assets that have a useful life of more than one year.
Fixed asset cards
For each capital asset, you can set up a fixed asset card to record information about the asset. You can group your fixed assets into main assets and their components. For example, you may have a building that consists of many parts where the building is the main asset and the parts are the components. Both the main asset and the components must be set up as individual fixed asset cards. After you have set up a component list, on the Fixed Asset Card page, the Main Asset/Component and Component of Main Asset fields are automatically populated.
Construction in progress assets are created as components of a main asset. After the construction is completed they are reclassified to a main asset or to another component that is of type asset.
Capital assets that are recorded under the pooled cost approach are to be reported by year of purchase in the applicable capital asset class. It is recommended that you create a pooled asset for each fiscal year and asset class, and that the Depreciation Starting Date is equal to the fiscal year start date.
To allow posting to a main asset, on the Fixed Asset Setup page, turn on Allow Posting to Main Assets. A main asset cannot be deleted until you remove its components from the component list.
Create a fixed asset card for each asset that must be assigned to more than one depreciation book.
To create a capital asset
Choose
, enter fixed assets, and then choose the related link.The Fixed Assets page opens.
On the action bar, choose New.
The Fixed Asset Card page opens.
In Description, specify a description of the asset.
In FA Class Code, specify the appropriate FA class code.
In FA Subclass Code, specify the appropriate subclass code.
The CIP/Preacquisition value is defaulted based on the FA subclass code that is specified when the subclass is related to construction in progress.
In Location Code, specify a location for the capital asset.
If you are using mySparkrock or if the asset is under construction, turn on TCA Expense Posting.
In Original Acquisition Date, specify a date.
In Ministry Asset Serial No., specify a value.
In Depreciation Book Code, specify a depreciation book.
In Posting Group, specify a posting group that defines the general ledger accounts to be used for posting transactions to this asset and this depreciation book.
In Depreciation Starting Date and Depreciation Ending Date, specify dates.
If applicable, turn on Use Half-Year Convention.
TCA expense posting
It is recommended that TCA Expense Posting be turned on for all construction in progress assets or for all assets if mySparkrock is used. Turning on TCA Expense Posting creates specific general ledger entries at the time of a purchase transaction and facilitate the purchasing process. The following T account displays how the entries affect the two income statement accounts:
The expense accounts hold the assets purchases and are compared against budgets. The use of the contra account allows for proper financial statement reporting by netting out the asset purchases from the general ledger expense account that was originally used.
Following the half year rule
At a minimum, it is recommended that the half year rule be applied to all new tangible capital assets that are acquired in a given fiscal year. Under the half year rule, six months of amortization is recorded for tangible capital assets that are acquired during a fiscal year. Therefore a five year asset is actually fully amortized over six years as follows:
Year 1 - ½ year
Year 2 - full year
Year 3 - full year
Year 4 - full year
Year 5 - full year
Year 6 - ½ year (remaining from year 1)
Depreciation ending date
It is recommended that the depreciation ending date always be a month end date. You can calculate the depreciation end date for existing assets using the formula below:
End of Month (Depreciation Ending Date) = Last Depreciation Date + Remaining Service Live (in years) * 365
Periodic depreciation
Sparkrock 365 calculates depreciation daily, which allows you to calculate depreciation for any period. For example, you can analyze current operating results on a monthly, quarterly, or annual basis. Sparkrock 365 uses a standard year of 360 days and a standard month of 30 days in the calculation. If a capital asset is used by several departments, periodic depreciation can be automatically allocated to these departments according to a user-defined allocation table.
Enter comments about a capital asset
You can enter comments about a capital asset on the fixed asset card.
To enter a comment about a fixed asset on the fixed asset card
Choose
, enter fixed assets, and then choose the related link.The Fixed Assets page opens.
Select the fixed asset for which you want to enter a comment, and then on the action bar, choose Related > Fixed Asset > Comments.
The Comment Sheet page opens.
Enter comments as required.
View statistics for a depreciation book
For each capital asset depreciation book, there is a Statistics page that provides a quick overview of the book value, depreciable basis, accumulated depreciation, and gains or losses on sales. Each main asset has a Statistics page.
To view the statistics for a depreciation book
Choose
, enter fixed assets, and then choose the related link.The Fixed Assets page opens.
Select the fixed asset for which you want to view statistics, and then on the action bar, choose Fixed Asset > Statistics.
The Fixed Asset Statistics page opens.
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