RE: Anyone with experience using Revaluation Model for Fixed Assets in NetSuite?
Does anyone have any experience using the Revaluation Method for subsequent recognition of Fixed Assets? I know there is an Asset Revaluation feature, but this is only limited to using a Write-Down account.
As a brief background, the Revaluation Method basically works like this: When a fixed asset is revalued up, the entry would be Debit Fixed Asset and Credit Revaluation Surplus. The Revaluation Surplus would be transferred to Other Comprehensive Income over the remaining life of the asset like its depreciation.
If the fixed asset is revalued down, it depends on whether it has any remaining Revaluation Surplus amount. If it does, it would be debited to that first and any excess would be to expense, iirc.
After checking here and in SuiteAnswers, I can’t find any answers to this atm.
From the Fixed Asset Manual/Guide:
To revaluate an asset:
- Go to Fixed Assets > Transactions > Asset Revaluation.
- On the Asset Revaluation page, enter values for the following fields:
- Asset ID/Name — Select the desired asset by name or ID. Selecting an asset will display the revaluation section, showing the revaluation amount details per accounting book and depreciation method.
- Accounting Books — Select the accounting book that you want to revalue.
- Write-down % — Enter the write-down percentage for revaluation. This will be applied to tax methods associated to an accounting book. For compound assets, the write-down percentage will be applied to all components. If you want to apportion a different write-down percentage for each component, go to Step 4.
- Transaction Date — Enter a date for the journal entry for this transaction. If the field is blank, the system will use the date when the revaluation is processed. The revaluation date must be on or after the Last Depreciation Date.
- Transaction Reference — Enter a reference to identify the journal entry for this transaction.
- Write-down Amount – The write-down amount will be computed based on the Current Cost and the Write-down %. You can enter a write-down amount to override the calculated value. This amount is subtracted from the current net book value. For compound assets, the write-down amount will display the total write-down of all the components.
- Adjusted Residual Value – Enter the new residual value of the asset.
- Adjusted Lifetime – Enter the new lifetime of the asset. When the adjusted lifetime is changed to a period that is equal to the last depreciation period, the status of the asset will be set to Fully Depreciated. If the asset’s revision rule is set to Current Period, the current net book value will equal the residual value, and the cumulative depreciation will equal the asset current cost.
- Adjusted Depreciation Method – Select the new depreciation method that will be used to depreciate this asset. write-down amount based on the write-down percentage.
3. Click Calculate to compute the write-down amount based on the write-down percentage. If the Multi-Book Accounting feature is enabled on your account, clicking Calculate will also enable the revaluation fields of the selected accounting books. If this feature is not enabled on your account, you do not have to click Calculate. The revaluation fields will be enabled when you select an asset
Note: If you are revaluing a simple asset, any changes you make to the accounting book selection and the write-down percentage requires you to recalculate the write-down amount. When you removed an accounting book for example, you need to click Calculate to remove the accounting method of that book from the revaluation. If you are revaluing a compound asset, you can click Process Revaluation regardless of any changes you make after calculating the write-down amount.
4.If you want to revalue only a specific component, or enter different write-down percentages for each component, go to the Component section. Enter the write-down percentage for the component you want to revalue.
5. Click Process Revaluation. Journal entries are created to post the difference in value. A revaluation depreciation history record will be written to each component of the compound asset. The compound asset record will have a list that shows the total of all the component revaluation, but will have no journal entries. You can find the journal entries in the component asset record under the Components > Depreciation History subtab. If you have enabled the Custom Transactions and Use Custom Journals preference, a specific journal entry will be created for asset revaluation. You can view these journal entries in Fixed Assets > Transactions > Journal Types. Note that you have to manually set the status of the journal entry to Approved before it is posted.
Note that if the Require Approvals on Journal Entries preference is enabled, and you do not have permission to approve journal entries, the system will require administrator approval before a journal entry is posted.
What if the asset is fully depreciated?
For example, the motor vehicle was recorded in Xero and only got migrated to NetSuite FAR. And the motor vehicle cost was GST inclusive in Xero and fully depreciated in Xero when transferred to NetSuite.
I have done the asset revaluation in NetSuite FAR and entered the GST amount under write down value, however, after doing so the NBV become negative of the GST amount, how should I make NBV zero and amount should be adjusted to Accumulated Depreciation, isnt it? As i checked the journal generated from FAR was
Dr Write Down Exp
Cr MV – at cost
The correct entry should be below in order to adjust the accumulated depreciation.
Dr Accumulated Depreciation
Cr MV – at cost