Fixed Asset Features and Objectives of FA System

Legler Systems Company

FA Features

Fixed Asset Features:

The primary purpose of the Fixed Asset System (FA System) by Legler Systems is to document capital assets and repair information in an online environment, so specific online procedures can be performed in seconds rather than the hours required by traditional batch methods of computer processing. This FA system performs the basic fixed asset objectives by providing a complete and accurate record of all asset transactions affecting each piece of equipment and property. This FA system also maintains an audit trail for verification of previously entered asset information.

The Fixed Asset System (FAS) is a computerized general purpose system designed to perform many day-to-day record keeping activities associated with the capital assets owned in most business enterprises and institutions. Capital assets cover real property (land and buildings), personal property (equipment and vehicles) and intangible property (copyrights, computer software and patents). Even equipment that is recorded as an expense, not capitalized, can be entered into this FA system to provide a complete inventory of all business assets.

Specific fixed asset features and objectives of this business software application are highlighted below:

Maintain a separate Asset Master Record on each and every capital asset (e.g. equipment, vehicles, building, property and goodwill) owned by the company. The basic information in these master records include, asset number, name, description, cost, date acquired, depreciation method, estimated salvage value and useful life. Similar assets can be grouped together by an Asset-Group code. A single asset costing as much as $450 million can be processed by the FA System.
Maintain a separate Repair Expense Record on equipment to track failure, service and repair expense history.
Calculate annual depreciation expense schedules for each asset and store the results in the Depreciation Expense Record. A "Calculate Only" option is available to determine the effect of a different depreciation method, life, convention code and bonus amount.
Provide up to four different "Books" (company, federal, state and other) to handle different depreciation methods associated with each asset, if required.
Print management reports, such as the Asset Master List and Equipment Repair Report, to provide an audit trail of data entered into the FA System, as well as provide a complete list of assets owned and repairs performed.
Print generalized fixed asset reports with the capability to extract specific asset information from the online database, such as "List the assets acquired between any From-To dates".
Print the Fixed Asset Posting Report summarizing general ledger depreciation expense by GL account code for either manual or automatic posting to the GL System. Either annual or monthly posting of depreciation expense is supported.
Print annual IRS Depreciation Worksheet (Form 4562) to document the depreciation deduction by year, including any assets sold during the current year.
Enable the user to update the consumer price index (CPI) rates used in the calculation of estimated replacement cost (procedure FA06) for insurance purposes by downloading a file from the Bureau of Labor Statistics.
Provide reporting capability by location, Asset-Group code and maintenance code. The location codes used by this system should be consistent with the location codes used by other accounting systems within the company. In a professional service environment (e.g. an accountant serving several clients), the location code can be used as the client identifier, so multiple clients share the same FA System.
Provide online inquiry capability to (1) display all data elements on a single fixed asset, (2) display all data elements on a single repair entry, (3) display annual depreciation schedule for an asset or all assets, (4) display matching asset names, and (5) display repair costs or asset purchases by month for the last 5 years.
Define an Active-Flag for each asset to prohibit online entry of new service data, yet reference that old asset for historical reporting purposes.
Maintain the total repair costs (optional) on each asset documented in the Asset Master Record.
Automatic voucher number assignment is done when new equipment repair transaction are added to the FA System for positive control and audit trail. This fixed asset feature can be overridden by the setting of System-Option-16 (DB03).
Define GL expense account codes at the asset level for subsequent use in posting depreciation expense to the General Ledger System. Procedure FA09 creates General Journal Records in the GL System or writes them to a Transfer File for input to an external general ledger application.
Assign a unique 6-digit number plus a 4-digit sub-number to each asset. The sub-number is used to identify components or sub-assemblies of an asset and may not have a cost associated with it.
Provide source document control over input transactions to the computer by establishing batch numbers.
Automatically update an internal Depreciation Expense Record with the results of calculation done by procedure FA03.
Support different depreciation methods, such as straight line, 200% declining balance and 150% declining balance. For older assets the sum-of-years digits, 125% declining balance, 100% declining balance and ACRS are available. Also, listed property maximum deductions for passenger automobiles (LPA) and clean-fuel vehicles (LPF) are supported. Non-depreciable assets, such as land, are assigned a depreciation method of "LAND" or "NONE".
Define a Service-Type code to classify repairs as regular service, non-scheduled repair (failure), warranty work or scheduled service requirements.
Print maintenance schedules of equipment due for regular service or preventative maintenance to minimize downtime. The preventative maintenance service requirements are stored in the Repair Expense Record (FA07) with a Service-Type code of "1".
Support mid-year convention codes of mid-quarter (1, 2, 3 or 4), half-year (H) and mid-month (M).
Calculate gain or loss on the disposition of an asset, including the calculation of depreciation expense in the year sold based on the month sold and convention code.
Handle half-year useful life values, such as 27.5 years for residential rental property.
Adjust annual depreciation expense by the percent of business use, if less than 100 percent.
Provide a system option (System-Option-38) to perform whole dollar rounding on all depreciation calculations (FA03) and entry of cost, salvage, bonus, price sold and estimated replacement amounts (FA01). This FA System handles dollars and cents (default).
Allow the entry of a negative cost to handle any type of depreciation expense adjustment.
Handle one-time setup or conversions of previously purchased assets (from another system) to allow for the entry of accumulated depreciation.
Provide a bonus amount field to enter one-time deduction, such as IRS Section 179 deduction. This bonus amount cannot exceed the asset cost.
Provide update control to minimize clerical errors, such as restricting the changing of depreciation method, life, bonus amount and convention code once depreciation expense has been posted the General Ledger System.
Automatically display a master record (Asset Master Record) or a detail record (Repair Expense Record) when function key F7 is pressed from procedure FA07, FA10 or FA13. This fixed asset objective enables the operator to quickly drill down to more information.
Automatic asset number lookup occurs whenever the asset name initials are entered as the asset number for fast asset number lookup. Asset name initials are manually or automatically set in the Asset Master Record to aid in looking-up or finding an asset number. For asset number lookup by name, enter the "#" character as the asset number and when prompted, enter the asset name or asset description.
Provide system options in the Company Control Record to handle 6-digit dates or 8-digit dates for data entry and reporting purposes.
In addition to online processing, batch job processing is supported where multiple FA report requests are entered online for later batch processing.
Easily enter notes or comments on a specific asset (FA01) or repair transaction (FA07) when the Trans-Code is set to "N" to automatically link to procedure DB17 (General Notes Record) in the DB System.

In addition to the above fixed asset objectives, the Fixed Asset System is designed to handle multiple companies, multiple Asset-Group codes and different locations.

The capability to print custom FA reports is provided by procedure DB12 in the Database Control System. Computer procedure DB12 is a general purpose custom report writer.

The FA System procedures that can be run by the user are identified in the Fixed Asset Menu document.

Asset Master Record:

Information about each fixed asset is stored in the Asset Master Record. Online entry procedure FA01 is used to add, change (modify), query and delete the Asset Master Record.

The primary key of the Asset Master Record (FAR) is the Record-Type code, asset number and sub-number. Five alternate keys are defined for rapid access to different groups of FAR data.

Repair Expense Record:

Each service or repair transaction is entered as a Repair Expense Record. Online entry procedure Fa07 is used to add, change (modify), query and delete the Repair Expense Record. For new repair transactions, the voucher number is automatically assigned using a sequence number counter in the Company Control Record (DB03) for voucher number control.

The primary key of the Repair Expense Record (RER) is the Record-Type code, asset number, asset sub-number and voucher number. Five alternate keys are defined for rapid access to different groups of RER data.

More Information on the FA Software:

For additional information on this online Fixed Asset software, e-mail Bill Legler in the SF Bay Area, California or go to the Fixed Asset System main page.