Asset Value Adjustment
If the value of an Asset changed suddenly due to any damages, it can be recorded using Asset Value Adjustment.
In case of fixed asset management, sometimes the value of an asset needs some adjustment. For example, if a laptop gets damaged for some reason, and its value will be dropped instantly. And in that case, we have to readjust the value of the asset.
Before creating and using Asset Value Adjustment, it is advised to create the following first:
- Enable ‘Calculate Depreciation’ in the Asset form
2. How to create an Asset Value Adjustment
- Go to the Asset Value Adjustment list, click on New.
- Select an Asset whose value is to be adjusted.
- Select a date.
- Enter the current and new value of the asset.
- Save and Submit.
On saving the system will book a “Gain/Loss on asset revaluation” and adjust the valuation of the asset. You can change the cost center and add a finance book.
On submitting, a Journal Entry is created under the ‘Accumulated Depreciations’ account.
Selling an Asset
To sell an asset, open the asset record and clicking on the Sell Asset button. This will take you to a Sales Invoice. In the Sales Invoice, enter details like Customer and Payment Due Date.
On submission of the Sales Invoice, following accounting entries will take place:
- “Receivable Account” (Debtors) will be debited by the sales amount.
- “Fixed Asset Account” will be credited by the purchase amount of asset.
- “Accumulated Depreciation Account” will be debited by the total depreciated amount till now.
- “Gain/Loss Account on Asset Disposal” will be credited/debited based on gain/loss amount. The Gain/Loss account can be set in Company record.
Union Mercantile Solutions ERP experts and consultant team are implementing the ERPNext Asset Management module. Union Mercantile Solutions can successfully implement and configure the Asset Management module of ERPNext according to your business need.