Managing Assets

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Asset data can be created for each entity in a Reportance.rep file. Go to the Assets tab to get started.


First, select the Entity for which you wish to view and prepare assets data.


If this is the first-time setup for an entity, select Create Year to create a starting Depreciation Year.

Depreciation Years


To add, edit or delete Depreciation Years, go to the Assets screen and click on Manage Years in the top right-hand menu. Here, you will see a list of the depreciation years which you can work with.


When adding or editing a depreciation year, you will see the following detailed screen:



Year

The year reflects the financial year for which you wish to start calculating. You can type the starting year when first setting up the Assets for the entity. For subsequent additional years, you will not be able to change the year, as it will always be the next sequential year from the last.


Start / End Date

You can record the date periods for the year, noting that it will default to a standard financial year. The starting date must always be the next day from the previous years starting date.


Apply Tax Rules for Financial Year

If you use non-standard financial years, you can use this field to specify which tax rules are to apply to that particular year. This will default to the financial year specified.


Use Small Business Depreciation

Reportance will use this field to determine whether you are eligible to add assets to Small Business Depreciation pools for this financial year.


Locked

Once a year is locked, the depreciation calculations for all assets in that year will no longer be recalculated. Note, however, that you can still delete an asset and the records for all years for that year will be deleted.


Important Note: Take care when creating the first Depreciation Year, as once set, you will only be able to create Depreciation Years after this year.



Asset Groups


Once you have created at least one Depreciation Year for the selected entity, you can select Assets from the left-hand side menu to manage the assets lists.



Here, you can create Asset Groups. These are general categories in which you can create assets, and usually correspond with the ledgers used in the client system to categorise assets. The assets module is built in such a way that it doesn't matter whether the assets are pooled or not, they can still be kept within their natural Asset Group.


For this reason, there is no need to create a 'Pool' Asset Group.


Click Add Asset Group to create a new group, where you can specify a name for the group. You can Edit and Delete an asset group from this list by clicking on the relevant buttons.


Note, when you delete an Asset Group, all assets in that group will also be deleted, along with each of their annual depreciation records (including for locked Depreciation Years), so exercise care prior to deleting.


Assets


With an Asset Group selected on the left hand list, you can now manage all assets for that group. Click Add Asset to add a new asset.



Details Tab


Allows you to enter basic values for the asset, as follows:


Name

Mandatory: A name to help identify the asset


Acquisition Date

Mandatory: The acquisition date. If unknown, we recommend you provide an approximate date prior to the year that you wish to start calculating depreciation for.


Identifier

Optional: The identifier field can be used to provide a unique code for the asset if desired


Description

Optional: A detailed description or any other notes about the asset


Additions History

Here, you can specify additions that have been allocated to the asset. All additions must be dated after the acquisition date of the asset. Click Add Additions to add to this list, for example:



Depreciation Tab


The top section of the Depreciation tab allows you to enter key details on how depreciation is calculated for the asset.


In data entry screens, you can set key values used in the calculation. Toggles are used to clarify whether the accounting value is different from the taxation value. 


If the toggle is off, then the accounting value will be identical to the taxation value, and any change made to the taxation value will be copied to the accounting value


If the toggle is on, then you can change the accounting value separately to the taxation value.


The available fields are:


Purchase



Cost

The initial cost of the asset which will be depreciated. 


Date to Commence Depreciation

The calculation for depreciation will commence on this date. This date can be different to the asset acquisition date.


Depreciation Calculation


These fields act as 'Initial Values', and will be the default values for the asset and the values set for the first year of depreciation calculation. In the Calculation Summary (see below) you can change these values for subsequent years.


Depreciation Method

Specify the method of calculation. If you choose, Pool as a method, you will also need to specify the Pool Type. Accounting depreciation can optionally use the same pools as the taxation records use.


Depreciation Rate

The rate at which depreciation is calculated subject to the method chosen.


Is the Rate Self Assessed

Will 


Residual Value

Lets you nominate the residual value used. This is for reference only, as you should specify the actual rate to use (which will factor any residual value in) in the Depreciation Rate field.


Private Percent

For taxation purposes only, you can specify the private percent to determine the overall deductibility of depreciation.


Pool Type and Year Entered Pool.

The pool type is used to set whether the asset has either started or been added to a pool. If the asset commences calculation in the pool, set Depreciation Method to Pool, Pool Type to the relevant pool type, and leave Year Entered Pool blank. If the asset is added to a pool in a year after the first year, set Depreciation Method to the original depreciation method used for the asset, set Pool Type to the relevant pool type, and specify the year the asset entered the pool in Year Entered Pool.


Opening Balances


If the asset was acquired in an earlier year than the first Depreciation Year for the entity, you can provide opening balances. Tick on Start calculation in a year after purchase to be given the option to add these values:


Commence Calculation In

Specify the year in which you wish to start calculating the assets depreciation in Reportance.


Opening Carrying Amount

Specify the opening carrying amount for the year specified above.


Total decline in value not deducted

Use this value to keep track of the private portion of the asset to assist in calculation of the assessable/deductible balancing adjustments on disposal of an asset.


Disposal


If the asset has been disposed, you can specify the details. Leave Disposal Date blank if the asset has not been disposed.


Disposal Value

The Termination Value for taxation purposes, or the value of the asset disposed for accounting purposes.


Disposal Date

The date the asset was disposed


Note, if you enter a Disposal Date prior to selecting a Pool Type for the asset, you will need to check the closing pool balances as the balancing adjustment will have already been calculated and reflected in the pool closing balances. See the article on Pooling for details.


Calculation Summary


The bottom third of the screen displays calculation summaries. You can view the calculations for either Taxation or Accounting by changing the Show details for filter.


If you select Show depreciation calculation details, you will get a detailed screen showing how the calculation for depreciation in each year is calculated. This area is also where you can change Initial Values on a year by year basis. The adjustments available are:


Carrying Amount Adjustment (CR AMT ADJ)

This lets you adjust the opening carrying amount up (positive) or down (negative) by the specified number for that year


Residual

Lets you specify a new residual value for later reference.


Rate

To change the rate, first tick Rate Varied to tell the system that the rate was varied in that year. Then, type in a new rate. Upon recalculation, the new rate will cascade until the next year in which the Rate Varied tick box is ticked


Self Assessed

You can indicate whether this rate is self assessed for the current year for the purposes of reporting in a tax return


After any change made to a single years calculation fields, click Recalculate to confirm the effects flow on to all years as expected.



Special Cases


Additions to an Asset using the Prime Cost method


If you add an addition to an asset using the Prime Cost method, the Income Tax and Assessment Act 1997 requires the depreciation formula to be adjusted to reflect the remaining useful life of the asset, refer to ITAA 1997 Section 40-75 (2)(b) and (3). 


In anticipation of this Reportance, automatically sets the Rate Varied checkbox for the year of the addition, and internally will now ensure calculation works off an adjusted cost base.


To finalise the rate, after creating an addition, go to the Depreciation tab for the asset, select 'Accounting' from the Show Details for drop-down box, and select Show Depreciation Calculation Details.


The revised rate should equal the formula: 1 divided by the remaining effective life at the start of the relevant year.


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