Fixed Assets

Overview

Fixed assets represent long-term tangible property or equipment that your organization uses in its operations. Each asset can be configured with various attributes and settings that determine how it is tracked and depreciated.

The assets module in mezan works in a decoupled way from other modules. Other modules can deposit assets acquisition expenses in a temporary assets account, and then when the asset is created, the expenses will be automatically transferred from the acquisition expenses account to the asset account. This allows for a more flexible and customizable asset acquisition process, where the asset is not tied to a specific transaction, and can be the result of multiple transactions, such as when a building is being developed by a construction company, expenses can accumulate over time in a temporary account, and then when the building is finished, the expenses can be transferred to the asset account.

Fields of the Fixed Asset Form Explained

  1. Name: The asset's display name. This is a required field. It will be used to identify the asset in the system.
  2. Reference: The asset's reference. This is an a required field. It can be any text you need to track the acquisition reference in reporting. It will default to the asset's name.
  3. Description: A description of the asset. This is an optional field. Can be used to add any additional information about the asset for later reference in the asset page.
  4. Tangible Asset: To indicate if the asset is a tangible asset. It will default to "false", this may influence how other features in assets management are available, and is useful for identifying assets that are not physical, such as trademarks, patents, or software.
  5. Acquisition Date: The date of acquisition of the asset. This is a required field. It will default to the current date, it is used as the transaction date for the acquisition in reporting.
  6. Acquisition Value: The cost of the asset. This is a required field. This is the transaction amount for the acquisition of the asset.
  7. Asset Account: The account to be used for the asset. This is a required field. This is the account that will be used to record the asset value in the general ledger.
  8. Acquisition Expenses Account: The account to be used for the acquisition expenses of the asset. This is a required field. This is the account that will be used to deduct the acquisition expenses of the asset in the general ledger. This is usually an assets type of account in the chart of accounts which is used to store the acquisition costs of the asset.
  9. Depreciation Settings: A section that allows for the configuration of the depreciation settings for the asset. The available options are:
    1. Enable Depreciation: To indicate if the asset is subject to depreciation.
    2. Depreciation Account: The account to be used for the depreciation of the asset. This is a required field if depreciation is enabled. This is the account that will be used to record the depreciation of the asset in the general ledger.
    3. Asset Lifetime: The number of years over which the asset will be depreciated. This is a required field if depreciation is enabled. In Mezan we always assume linear depreciation, so the depreciation rate will be calculated as 100% / asset lifetime. Mezan does not perform automatic depreciation calculations, but can suggest for you the depreciation rate based on the asset lifetime when creating a depreciation transaction.
    4. Residual Value: The value of the asset that is considered to be its scrap value or salvage value. This is a required field if depreciation is enabled. The usual case if the asset is not expected to have any residual value, is to set it to 1.
  10. Appreciation Settings: A section that allows for the configuration of the appreciation settings for the asset. The available options are:
  11. Enable Appreciation: To indicate if the asset is subject to appreciation. It will default to "false". Can be enabled to allow for the asset to be appreciated in the future, such as for realestate, or other assets that are expected to increase in value over time.
  12. Appreciation Account: The account to be used for the appreciation of the asset. This is a required field if appreciation is enabled. This is the account that will be used to record the appreciation of the asset in the general ledger.
  13. Transaction Note: This is a text field to add any notes or description about the invoice. This is optional and purely for reference purposes. It does not show up on the printed invoice, only shows up on the general ledger and account statements of the related transactions.

Other properties of the Fixed Assets

  1. Confirmation Status: This is used to track the status of the asset. It can be "Draft" or "Confirmed". This is a common approach across all transactions in Mezan. Confirmed state can influence if it shows up in reports by default or not, as reports can be filtered based on the confirmation status.
  2. Organization Member: This is the organization team member who created the asset. It is automatically populated by the system based on the user who created the asset. It is useful in reporting, permissions, and audit purposes.

Transactions Generated by Fixed Assets

  1. Asset Account: A debit transaction is created when the asset is acquired. This is a debit transaction on the asset account of the asset to record the acquisition cost.
  2. Acquisition Expense Account: A credit transaction is created when the asset is acquired. This is a credit transaction on the acquisition expenses account of the asset to record the acquisition expenses.
  1. Reporting Dimensions
  2. Custom Fields
  3. Attachments
  4. Comments
  5. Team Permissions