An Asset is any valuable Item owned by a Company.

Furniture, computers, mobile phones, printers, cars, and manufacturing equipment are all examples of assets. Typically, an asset refers to a tangible item that is either located on the company premises or is in possession of an employee. In some cases, an asset may also be an intangible item.

An asset’s useful life extends over multiple years, and therefore, its economic value is distributed over those years from an accounting standpoint. For instance, if you purchase a printer for $300 and anticipate it to be useful for three years, the accounting approach spreads out the $300 expense over the three-year period, allocating $100 for each year. Most countries have regulations governing such calculations.

In BizCentric, the Asset record serves as the cornerstone of the asset management module. All transactions related to an asset, such as purchasing, depreciation, maintenance, movement, scrapping, and sales, are documented against the Asset record.

To access the Asset list, go to: > Home > Assets > Assets > Asset

1. Prerequisites

Before creating and using Asset, it is advised to create the following first:

• Item with ‘Is Fixed Asset’ enabled.
• Asset Category

2. How to create an Asset

An Item representing the asset should be created. The ‘Maintain Stock’ should be unchecked and ‘Is Fixed Asset’ must be checked.

2.1 Auto creation of assets

You can set up BizCentric to generate assets automatically upon submission of a Purchase Receipt by activating the ‘Auto Create Assets on Purchase‘ option in the Item settings.

Once you’ve enabled automatic asset creation for the item that represents an asset, you’ll need to specify the asset location when submitting the Purchase Receipt.

Upon submission of the Purchase Receipt, a confirmation message indicating the successful creation of assets will be displayed.

2.2 Manual creation of assets

If you prefer manual asset creation, you can accomplish this by creating an Item with the ‘Is Fixed Asset’ option enabled and leaving the ‘Auto Create Assets on Purchase‘ unchecked. Upon submission of a Purchase Receipt or Purchase Invoice containing that Item, a message will prompt you to manually create assets.

Here are the steps to manually create assets:

1. Navigate to the Assets list and click on New.
2. Provide a name for the asset.
3. Choose the Item Code; the Item Name and Asset Category will be automatically populated.
4. Select the Asset Owner, which could be the Company, Supplier, or Customer.
5. Specify the relevant Company/Supplier/Customer.
6. Choose the Purchase Receipt/Purchase Invoice. The Purchase Date and Gross Purchase Amount will be filled in automatically.
7. Select a Location, such as “Mumbai Office.” This information will be automatically retrieved if specified in the Purchase Receipt items table.
8. Set the Available-for-use Date. Depreciation will commence from this date.
9. Save and Submit the asset record.

Please note that you need to create a separate asset record for each individual asset purchased. For instance, if you bought five computers and created a single Purchase Receipt with a quantity of five, you would still need to manually create five asset records.

2.3 Creating composite assets

If, for example, you want to create a “Computer” asset made from multiple different items like “Monitor”, “Keyboard”, etc., you can create a composite WIP asset by checking the is_composite_asset checkbox. Afterwards, you can tag that asset in the WIP Composite Asset field of the Item in Purchase Receipts/Invoices, and once all the items are available, you can use the Asset Capitalization feature to capitalize the asset.

2.4 Importing existing assets

When transitioning from a legacy system to BizCentric, you’ll need to input details of all previously purchased assets along with their depreciation information.

For existing assets, you can create the asset record directly by selecting the “Is Existing Asset” checkbox and providing the following details:

1. Gross Purchase Amount
2. Purchase Date
3. Available-for-use Date
4. Opening Accumulated Depreciation: The total depreciation amount already recorded for the existing asset.
5. Number of Depreciations Booked: The count of depreciation entries already recorded.
6. Is Fully Depreciated: Check this box if the existing asset has been fully depreciated.

Based on these inputs, the system will automatically generate a schedule for depreciating the remaining amount.

2.5 Additional options when creating an Asset

1. Custodian: The employee who will carry the asset.
2. Department: The department of the Custodian.
3. Calculate Depreciation: Enable this checkbox to calculate depreciation of Assets.

3. Features

3.1 Depreciation

• Frequency of Depreciation (Months): The number of months between depreciations.
• Total Number of Depreciations: The total number of depreciations corresponds to the asset’s useful life. For existing assets that are partially depreciated, specify the number of remaining depreciations. For instance, if the depreciation frequency is set to 12 months and the number of depreciations is 3, one depreciation will be recorded every 12 months for a period of 3 years.
• Depreciation Method: Four depreciation methods are available: Straight Line, Written Down Value, Double Declining Balance, and Manual. You can find more details here.
• Depreciation Posting Date: The date from which booking of depreciation will be started.
• Expected Value After Useful Life: The Useful Life refers to the duration during which the company anticipates the asset will remain productive. Beyond this period, the asset may either be scrapped or sold. If it is sold, indicate the estimated value here, also referred to as Salvage Value, Scrap Value, or Residual Value.
• Salvage Value Percentage: If you want the Expected Value After Useful Life to be calculated automatically based on a percent of the Gross Purchase Amount, mention the percent here.
• Rate of Depreciation: This calculation will be derived from the figure entered in the expected value after the asset’s useful life.
• Finance Book: The book against which the depreciation entries should be booked. For more details, click here.
• Depreciate based on daily pro-rata: This method divides the depreciation amount by the number of days in a given calendar period. For instance, the depreciation amount in February is lower than in months with 31 days.
• Depreciate based on shifts: This feature allows you to specify the number of shifts during which the asset operates within a given period, facilitating its depreciation accordingly. Initially, you must define the shift names along with their respective shift factors in the “Asset Shift Factor” document type (for instance: “half”: 0.5, “single”: 1, “double”: 1.5, and “triple”: 2) and set a default value. Subsequently, if you need to modify the shifts of an asset for a specific period, you can do so using the “Asset Shift Allocation” document type, and the remaining shifts will be automatically adjusted.

3.2 Depreciation Schedule

When recording depreciations for this Asset, you’ll notice the Depreciation Schedule section become visible. This table includes columns for Finance Book, Schedule Date, Depreciation Amount, Depreciation Taken, and Journal Entry.

3.3 Insurance Details

If Insurance has been taken for the Asset you’re recording, you can store the following Insurance details:

• Policy number
• Insurer
• Insured value
• Insurance Start Date
• Insurance End Date
• Comprehensive Insurance

3.4 Accounting Entries

Upon submitting an asset, the “Capital Work in Progress” account will be credited, while the asset account associated with the asset will be debited. Submission is permissible only after entering the “Available-to-Use Date.” If the “Available-to-Use Date” is set for a future date, the accounting entry will be automatically booked on that date through the scheduler.

3.5 Maintenance

Ticking on Maintenance Required allows recording Asset Maintenance entries for this Asset. To know more, visit the Asset Maintenance page.

3.6 After Submitting

Once you create an Asset, you’ll see options to transfer, scrap, or sell the asset. From the Make button, you can adjust its value and make a depreciation entry.

4. Related Topics 

1. Asset Maintenance
2. Purchase Receipt
3. Purchase Invoice