How To NetSuite - Step-by-Step Fixed Asset Management

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About this series:

In addition to our other coverage, Murph started a new series of “How to” articles related to various ERPs. In today's edition, he is looking at his first “How to NetSuite.” Some of these will be short, others long, depending on the particular ERP and feature Murph decides to highlight.

Read away this week. Even though Murph intends to put the first 'How to' for each of the ERPs he is writing about within Insightful Accountant, if you want more of Murph's "How To" for any of the ERPs he is covering, you are going to need to head over to our 'Be Insightful' Premium Content in the future to keep up with all the future editions.

How to NetSuite: Fixed Asset Management

Large or small, businesses acquire fixed assets over time. Depending on the type of fixed asset, businesses are required to depreciate them using various depreciation methods based on those types. Typically, a fixed asset will have both 'book' and 'tax' depreciation methods which may or may not be the same. In order to justify the depreciation amounts recorded on the Balance Sheet, Profit & Loss and Tax Returns, a Fixed Asset Register of some sort (paper, spreadsheet, or computerized) will record such information as the asset, the date acquired, the cost when acquired, its location, its accumulated depreciation, and book and tax values. 

It's a lot of work without these records being incorporated into your accounting system. Well, Oracle NetSuite users with the NetSuite Fixed Assets Management 'SuiteApp' (FAMS) turn work into 'suiteness' by making the tedious and recurring process of tracking and accounting for fixed assets easier by eliminating the need to depreciate and manage assets manually.

There are six essential steps when using the FAMS. This 'How to' summarizes those steps. It is not intended to be a detailed guide, instruction set, or checklist of every procedure and sub-procedure that may be required. It is intended to illustrate for users of other systems, or manual processes, how this automated approach streamlines an otherwise cumbersome set of tasks.

Step 1 - To track and account for Fixed Assets properly in NetSuite when using the Fixed Assets Management SuiteApp (FAMS), users must create Fixed Assets accounts to correctly reflect the value of fixed assets on your Balance Sheet and P&L Reports. Once those accounts have been set up, the user links them to the FAMS to use them.

Step 2 – Users must set up and assign Depreciation Methods so that NetSuite can calculate the asset's depreciation. You can use any pre-configured depreciation method or create a new one.

  • Users then link these Depreciation Methods to each asset.
  • One Depreciation Method is used for the first part of an asset's life, and a different method is used for the remaining life of the asset.
  • The FAMS lets you maintain separate book depreciation and tax depreciation calculations. Each fixed asset's Book (accounting) depreciation is linked to journal postings and transactions within NetSuite.

Step 3 - Users must set up Asset Types before creating assets in FAMS. You can build a variety of Asset Types for identification and reporting purposes. Each Asset Type contains the following information:

  • Name for the Asset Type
  • Asset Type Description
  • Default Depreciation Method for Asset Type
  • Residual Percentage
  • Asset Lifetime

Step 4 – Users must create each Fixed Asset to specify their Asset Type, Depreciation Method, and Asset account. There are four ways to create Fixed Assets:

  • Manual Method - You can create assets manually without starting from an existing transaction. This method is typically used for assets being transferred from older systems; you enter all the details related to the asset and create it.
  • Import via CSV file - CSV Imports are another way to create fixed assets, and they are the recommended approach for bringing in historical Asset Creation assets from older systems. All details regarding the assets, such as Name, Asset Type, Depreciation Method, Remaining Life, Current Value, and more, can be entered into a CSV template and uploaded into the FAMS, so you don't need to input historical assets one by one manually. You can also use these imports to bring in Depreciation History Records.
  • Asset Creation – Users can create assets through transaction records. Once you enter an asset through a transaction, it's created.
  • Asset Proposal – This fourth method for creating new assets is the simplest once you are up and running. This method captures any assets purchased through transaction records, such as bills. Users can then preview, make necessary changes, and finalize the asset creation.

Step 5 – Managing Your Fixed Assets. Once created, users can manage those assets to ensure accuracy and compliance.

  • Asset Depreciation – FAMS can automatically depreciate or depreciate assets following a revision of any depreciation method or period. FAMS decides which assets require depreciation and then creates batched Journal Entries that post depreciation values.
  • Fixed Asset Revaluation allows users to revalue or write down any existing asset. Users can enter a new Net Book Value for the asset or change the depreciation method and the asset lifetime.
  • Fixed Assets Disposal lets users manage the sale or disposal of fixed assets. FAMS provides all the appropriate GL Journal Entries to record the impact of fixed asset sales or disposals correctly.

Step 6 – Reporting of Assets, Value, and Depreciation. The FAMS provides comprehensive reporting of your assets, their valuation, and their depreciation.

  • The Fixed Assets Listing shows the fiscal year's total acquisition costs, additions, disposals, transfers, and write-ups.
  • The Asset Register Report lists each asset's costs, accumulated depreciation, and net book value.
  • The Asset Summary Report by Period lists the cost, valuation, depreciation, and net book value totals for any selected asset type(s).
  • The Depreciation Schedule Net Book Value Report by Period shows each asset's current value.
  • The Depreciation Schedule Period Depreciation Report by Period shows the total depreciation for each asset.
  • The Depreciation Monthly Report by Period shows the depreciation expense by asset, the asset records, and all related journal entries.

Disclaimer:

Content within this feature has been adapted from source materials furnished by Oracle NetSuite. Referenced source materials or content appearing within this Insightful Accountant feature were adapted and are furnished solely for educational purposes.

NetSuite and Oracle are registered trademarks of Oracle Corporation. Oracle Corporation is a publicly-traded NYSE-listed (ORCL) multinational corporation headquartered in Austin, Texas (USA).

For more than 25 years, Oracle NetSuite has helped organizations grow, scale, and adapt to change. NetSuite provides an integrated system that includes financials / Enterprise Resource Planning (ERP), inventory management, HR, professional services automation and omnichannel commerce, used by more than 37,000 customers in 219 countries and dependent territories.

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