How to set up and then depreciate low-cost assets according to German law in Microsoft Dynamics GP

Applies to: Fixed Assets

INTRODUCTION


The German law that goes into effect in January 2008 requires companies in Germany to pool low-cost movable assets into a group. Currently, low-cost movable assets are defined as movable assets that have acquisition costs or manufacturing costs that are greater than 150 euros and less than 1,000 euros. The value of this pool must be depreciated over a linear period of five years. You can do this by setting the depreciation period of this group to five years.

Note The group value will remain the same even if the assets are sold during the depreciation period.

MORE INFORMATION


To set up and then depreciate a group of low-cost assets in Microsoft Dynamics GP or in Microsoft Business Solutions - Great Plains 8.0, follow these steps.

 

Step 1: Create a group of low-cost assets

1. Create a class ID in the Class Setup window. To do this, use the appropriate method: • In Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Setup , point to Fixed Assets , and then click Class .
• In Microsoft Dynamics GP 9.0 and in Microsoft Business Solutions - Great Plains 8.0, point to Setup on the Tools menu, point to Fixed Assets , and then click Class .


     
2. Create a book ID in the Book Setup window. To do this, follow these steps:
a. Open the Book Setup window. To do this, use the appropriate method: • In Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Setup , point to Fixed Assets , and then click Book .
• In Microsoft Dynamics GP 9.0 and in Microsoft Business Solutions - Great Plains 8.0, point to Setup on the Tools menu, point to Fixed Assets , and then click Book .


     
b. In the Book ID field, type a book ID.
c. In the Description field, type a description.
d. In the Depreciation Period list, click Periodic , and then click Save .
3. Associate the book ID with the class ID in the Book Class Setup window. To do this, follow these steps:
a. Open the Book Class Setup window. To do this, use the appropriate method: • In Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Setup , point to Fixed Assets , and then click Book Class .
• In Microsoft Dynamics GP 9.0 and in Microsoft Business Solutions - Great Plains 8.0, point to Setup on the Tools menu, point to Fixed Assets , and then click Book Class .


     
b. In the Book ID list, click a book ID.
c. In the Class ID list, click a class ID.
d. In the Depreciation Method list, click Straight-Line Orig Life .
e. In the Averaging Convention list, click the appropriate averaging convention.
f. In the Orig LifeYears, Days field, type 5 .
g. Click Save .
4. In the Asset General Information window, create an asset ID for each low-cost asset. To do this, follow these steps:
a. On the Cards menu, point to Fixed Assets , and then click General .
b. In the Asset ID list, click an asset. Or, type a new asset ID.
c. In the Class ID list, click the class ID that you created in step 1.
d. Click Save .
5. Create a book record for the asset. To do this, follow these steps:
a. On the Cards menu, point to Fixed Assets , and then click Book .
b. In the Asset ID list, click an asset ID.
c. In the Book ID list, click the book ID that you created in step 2.
d. Click Save .

Step 2: Depreciate the group of low-cost assets

1. Create an asset group ID in the Select Assets window. To do this, follow these steps:
a. On the Transactions menu, point to Fixed Assets , and then click Select Assets .
b. Click New Group . In the Group Name field, type a name for the group. Name the group to reflect the purpose. For example, name the group LOWCOSTASSETS.
c. Click OK .
d. Click to select the Asset ID check box to add assets to the group.
e. Click OK .
2. Depreciate the assets in the group. To do this, follow these steps:
a. Open the Depreciation Process Information window. To do this, use the appropriate method: • In Microsoft Dynamics GP 10.0, point to Tools on the Microsoft Dynamics GP menu, point to Routines , point to Fixed Assets , and then click Depreciate .
• In Microsoft Dynamics GP 9.0 and in Microsoft Business Solutions - Great Plains 8.0, point to Routines on the Tools menu, point to Fixed Assets , and then click Depreciate .


     
b. In the Asset Group ID list, click the asset group ID that you created in step 1.
c. In the Depreciation Target Date field, type a date.
d. In the Books on file list, click a book ID, and then click Insert .
e. Click Depreciate . When you are prompted to continue the depreciation process, click OK .

Depreciation

Depreciation is calculated for each selected asset and for each period. After the depreciation process is complete, the depreciation expense account is debited. And, the depreciation reserve account is credited in the general ledger.

You can view the depreciation details for the assets that you depreciated in the group in the Financial Detail Inquiry window. To open the Financial Detail Inquiry window, point to Fixed Assets on the Inquiry menu, and then click Financial Detail .

Important Do not depreciate the low-cost assets individually by using the Depreciate Asset window.

 

Sell or retire an asset

To sell or to retire an asset that is part of the group of low-cost assets, create a new group. Then, move the asset from the depreciation group to the new group. This will help identify the asset that is marked for sale or for retirement. When you retire an asset, you must post a revenue transaction in General Ledger in Microsoft Dynamics GP.

Important Do not retire low-cost assets individually by using the Retirement Maintenance window. And, do not retire a group that contains the assets that you want to sell or retire by using the Fixed Assets Mass Retirement window.

REFERENCES


For more information, see the Fixed Assets Management documentation that is included with the Microsoft Dynamics GP installation or with the Microsoft Business Solutions - Great Plains 8.0 installation.