What is Fixed Asset Management?

Fixed Asset Management in NetSuite is a module within the ERP system designed to track, depreciate, and manage an organization’s fixed assets efficiently. It enables users to record asset details, calculate depreciation, schedule maintenance, manage disposals, generate reports, and integrate with other financial modules.

How Fixed Asset Management module helps Finance?

The Fixed Asset Management module in NetSuite supports finance departments by ensuring:

• Accurate Financial Reporting: Tracks fixed assets meticulously for precise financial statements. 
• Depreciation Calculation: Automates depreciation to ensure compliance with accounting standards. 
• Cost Control: Provides insights for informed asset management decisions. 
• Compliance and Auditing: Facilitates adherence to regulations through generated reports. 
• Integration with Financials: Seamlessly integrates with other modules for accurate recording. 
• Streamlined Processes: Automates asset management tasks to reduce errors and workload.

In sum, it enables finance teams to effectively manage fixed assets, optimize their utilization, control costs, and ensure compliance, contributing to the organization’s financial health and performance.

Depreciation

Depreciation refers to the systematic allocation of the cost of a fixed asset over its useful life, using predefined depreciation methods. NetSuite’s Fixed Asset Management module automates this process, allowing users to accurately calculate and record depreciation expenses for their fixed assets. 

In NetSuite, depreciation is the gradual allocation of a fixed asset’s cost over its useful life. For example, if a company purchases equipment for $10,000 with a 5-year lifespan, NetSuite will automatically spread out the $10,000 cost over 5 years, recording $2,000 in depreciation expense each year.

Various Asset types

Various types of assets can be classified based on their nature, characteristics, and intended use. Some common categories of assets includes:

• Tangible Assets: Physical items like property, equipment, and inventory. 
• Intangible Assets: Non-physical assets such as intellectual property and goodwill. 
• Financial Assets: Represent claims to future cash flows or economic benefits, including cash, stocks, and bonds. 
• Investment Assets: Held to generate income or capital appreciation, like real estate and equity investments. 
• Operating Assets: Used in day-to-day operations, such as machinery and vehicles.

We can schedule depreciation entry monthly/quarterly

Yes, you can schedule depreciation entries on a monthly or quarterly basis, depending on your accounting practices and the reporting requirements of your organization.

To schedule depreciation entries monthly or quarterly:

• Choose Depreciation Method: Select a depreciation method like straight-line or declining balance. 
• Calculate Depreciation Amount: Determine the monthly or quarterly depreciation amount based on the chosen method and the asset’s useful life. 
• Set Up Schedule: Create a schedule detailing when and how much depreciation to record for each period. 
• Automate (if possible): Use accounting software to automate depreciation entries, generating them at the end of each period. 
• Manual Entry (if needed): If automation isn’t an option or for unique cases, manually record depreciation expenses accurately. 
• Review and Adjust: Regularly review the schedule for accuracy and adjust as necessary. 
• Include in Financial Statements: Ensure depreciation expenses are included in financial statements.

Asset Transfer between multiple Subsidiaries

Key elements to be prepared:

• Identify Assets: Determine assets for transfer and document details. 
• Assess Legal and Tax Implications: Evaluate legal and tax considerations. 
• Agreement and Documentation: Create transfer terms agreement and complete necessary paperwork. 
• Valuation of Assets: Determine asset value based on market or book value. 
• Accounting Entries: Update records in both subsidiaries, adjusting assets’ value. 
• Transfer Process: Physically move assets, managing logistics. 
• Asset Reconciliation: Ensure accurate reflection of assets in accounting systems. 
• Reporting and Disclosure: Disclose transfer in financial reports as per regulations. 
• Post-Transfer Monitoring: Monitor assets for effective utilization and risk management.

Asset Disposal process

Asset disposal involves removing a fixed asset from a company’s records, often by selling it or writing it off. This process includes adjusting accounting records to reflect the asset’s removal and any resulting financial effects, such as gains or losses. 

The Fixed Assets Management SuiteApp simplifies asset disposal, offering options to write off or sell assets.

• Selling Assets: You can input sale proceeds, and the system calculates the difference between the asset’s value and proceeds. This updates the general ledger and generates a sales invoice. 
• Writing Off Assets: Asset values are set to zero on the ledger when written off.

During disposal, the system records depreciation histories for both accounting and tax methods separately, ensuring accurate records for each.