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Fixed Assets - multiple parts of one

  • 1.  Fixed Assets - multiple parts of one

    GOLD CONTRIBUTOR
    Posted 17 days ago
    We had flooring done at one of the houses we own.  In May, we were charged $11,500 for "progress".  I set that up as an asset, but haven't assigned it to the book yet.  July 1, 2020, new fiscal year.  We have now paid the remainder, and I need to add additional $$ to this asset.  I'm thinking that I should set up a master asset ID, and then enter another "flooring" asset, and link them both to the Master.  Will that work??  Technically, the "placed in service" date is the date that the project was complete.  If I just update the amount, I'm afraid I'll lose that history of what's what at 6/30/20.

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    Lisa Levendusky
    Exceptional Persons, Inc.
    Waterloo IA
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    Academy - Online Interactive Learning from Experts


  • 2.  RE: Fixed Assets - multiple parts of one

    TOP CONTRIBUTOR
    Posted 17 days ago
    The proper accounting is to show the $11,500 as a deposit, and then depreciate the entire amount when placed in service.
    If the boss wants to depreciate the asset in two pieces, the difference in depreciation would be immaterial, and the world will definitely not end sooner because of this decision.

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    Bruce Strom
    Programmer Analyst
    Paradise GP Consulting, Inc.
    Sunrise FL
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    Academy - Online Interactive Learning from Experts


  • 3.  RE: Fixed Assets - multiple parts of one

    Posted 16 days ago
    Hi Lisa,
    There are always many ways to do something, some are better than others and require less work in the long run.
    As much as we see Assets setup based on the Purchase Transactions, the Asset should be the item that an outsider will see from the future.  That being said, multiple payables transactions can be linked to an asset that has not been placed into service and the value increased with each association.  When the contract is complete and final billed, everything is linked together and only one asset appears on the reports for the rest of time.

    I like to use the sub-asset numbers, for additional value added to the initial asset later in life.  For example, a major repair of a mechanical unit.  The unit has been actively depreciated and the major repair can be depreciated independently, but associated.

    I hope this helps.

    Douglas

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    Douglas Meade
    Business Solution Architect
    BrandForces
    Fort Lauderdale FL
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    Academy - Online Interactive Learning from Experts


  • 4.  RE: Fixed Assets - multiple parts of one

    SILVER CONTRIBUTOR
    Posted 16 days ago

    Lisa,

    Yes, I would recommend setting up a MasterID, and a new asset for the flooring.  Adding to the original basis, will miss some of the history of the asset.  We set ours up, with the same main number asset, and end them 01, 02, for the additions to the same asset.

    Hope that helps.



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    Pam Stephenson
    Director of Accounting and Finance
    Ashley Ward, Inc.
    Mason OH
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    Academy - Online Interactive Learning from Experts


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