Fixed Assets Account Entries in Different Scenarios

AP INVOICE: (Non PO Based Invoice)

If we get into the different accounting entries so assuming that you purchase Fixed Assets
without any PO, then the first Journal entry could be as shown below. Source for the Asset
Clearing Account is concern it is manually entered by the user while creating the AP Invoice
but keep it in mind that we need to again push the paticular data to FA and hence, whatever the
Asset Clearing Account which is entered by the user manually in this AP Invoice should match
with the Asset Clearing Account mapped to the any of the Asset Category.
Account Code combination manually entered by
Asset Clearing Account Dr
user
Account Code combination is derived from Vendor
AP Liability Account Cr
site setup
When you make the payment of your AP Invoice the other entries will be like

AP Liability Account Dr Bank Account Cr

PO Based
When you create a purchase order there is no accounting entry. When you create a PO Receipt
the Journal entry is
Account Code combination is derived from
Receiving Inventory Account Dr
Inventory Receiving Options
Account Code combination is derived from
Inventory AP Accrual Account Cr
Inventory Org. Parameters
Item Delivered (i.e. Put Away)

Asset Clearing Account Dr

Inventory AP Accrual Account Cr Purchasing Options

AP INVOICE

When you create PO based AP Invoice as you already debited your Asset Clearing
Account(Item Delivery)

Inventory AP Accrual Account Dr Purchasing Options

Account Code combination is derived from Vendor
AP Liability Account Cr
site setup
Asset Addition (After Mass Addition Process)
After Mass Addition Process the data will be pushed from AP to FA. In FA once we Run Mass
Addition and Post Mass Addition Programs the Asset will be created. The Journal entry will be
as shown below,
Account Code combination derived from Asset
Asset Cost Account Dr
Category setup
Account Code combination derived from Asset
Asset Clearing Account Cr
Category setup
If you look at all these accounting entries you will have the net impact of Asset Cost Account
Dr, AP Liability Account Cr. When you make the payment AP Liability Account Dr and Bank
Account Cr.

After running of Depreciation Process

After Depreciation program is completed. Once you Run - Create Accounting Program the
accounting entries which are generated for depreciation as follows
Account Code combination derived from Asset
Depreciation Account Dr
Assignment level of Asset.(Asset Workbench)
Accumulated Depreciation Account Code combination derived from Asset
Cr
Account Category setup

CIP Asset Addition

When you add CIP Asset the Journal Entry will be

Account Code combination derived from Asset
CIP Asset Cost Account Dr
Category setup
Account Code combination derived from Asset
CIP Asset Clearing Account Cr
Category setup
AP Invoice ( For adding CIP Asset )

If you use AP to Purchase CIP Asset the Accounting entries will be

Account Code combination manually entered by
CIP Asset Clearing Account Dr
user
Account Code combination is derived from Vendor
AP Liability Account Cr
site setup
Once it is pushed to FA after Prepare Mass Addition and Post Mass Addition Completed

CIP Asset Cost Account Dr

CIP Asset Clearing Account Cr

Capitalizing of CIP Assets

 When you Capitalize your CIP Assets the Accounting Entries will be
Account Code combination derived from Asset
Asset Cost Account Dr
Category setup
Account Code combination derived from Asset
CIP Asset Cost Account Cr
Category setup

Retirement of Assets

As far as the Retirement is concern Proceeds of Sale Clearing Account Dr and the Proceeds of
Sale Cr, because assuming that you received some money when you are retiring your asset.
Accumulated Deoreciation Account Dr and Asset Cost Cr. Assuming that you oncur certain
expenditure for retiring of an Asset, Cost of Removal Dr, Cost of Removal Clearimg Account
Cr. The net balance figure will go to Net Book Value Retired Account or your Gain or Loss
Account.
Proceeds of Sale Clearing Account Code combination is derived from
Dr
Account Book Controls
Accumulated Depreciation Account Code combination derived from Asset
Dr
Account Category setup
Account Code combination is derived from
Cost of Removal Dr
Book Controls
Account Code combination derived from Asset
Net Book Value Retired Dr
Category setup
Account Code combination derived from Asset
Asset Cost Account Cr
Category setup
Account Code combination is derived from
Proceeds of Sale Account Cr
Book Controls
Cost of Removal Clearing Account Code combination is derived from
Cr
Account Book Controls

Create AR Receipt
Here we are assuming that we receiving some money when we are Retiring an Asset by selling
it to someone
Bank Account Dr Receipt Method
Proceeds of Sale Clearing Account Code combination is derived from
Cr
Account Book Controls
So if you the net impact your Bank Account is DR and Proceeds of Sale Cr (Proceeds of sale is
actually a Revenue item) and Cost of Removal is concern as above mentioned Cost of Removal
is Dr and Cost of Removal Clearing Account is Credited. So we need to clear this Cost of
Removal Clearing Account.

Making Payment of AP Invoice

 When you create your AP Invoice
Cost of Removal Clearing Account Code combination is derived from
Dr
Account Book Controls
Account Code combination is derived from Vendor
AP Liability Account Cr
site setup