TL;DR

This video walks through the full lifecycle of managing fixed assets in Dynamics 365 Business Central. It shows five ways to add assets (manual entry, copy, purchase orders, purchase invoices, and Excel import), how to acquire them using different methods, and how to retire or dispose of assets using the Fixed Asset G/L Journal. It also explains how Fixed Asset Posting Groups determine which GL accounts are used for each transaction type, ensuring accurate financial reporting.

I want to show you two basic transaction types in Dynamics 365 Business Central; we’re going to take a look at fixed assets. We’re going to look at acquisition transactions and also disposal transactions. So let’s get started. There are a number of ways to get fixed assets added to your system. In Business Central, there’s a manual entry, you can copy an existing asset to create a new asset from that, you can add an asset through a purchase order or through a purchase invoice, and you can also import from Excel. Then the second step is acquiring that asset, so we’ll take a look at that as well. We’ll also look at disposal and retirement. It’s a fairly simple process. We’ll take a look at that, and associated with that are the Fixed Asset Posting Groups; we’ll look at options there and why it’s important to set them up so your reporting out of the General Ledger is what you want.

Manually Adding Fixed Assets

I’m logged into Business Central, and these are the fixed assets that I currently have in the system. I can easily add to this by manually typing in a new asset, so let’s go ahead and do that. I’m going to click New and type in the description of what I’m adding. Along with that, I want to assign a fixed asset class code and a subclass code. The class codes I have set up in my system are pretty basic. I’m going to use this, and then I want to select the proper fixed asset subclass code. The reason it’s important is not just because it’s a tag, but because it’s tied to a Fixed Asset Posting Group. On that posting group are a number of different types of transactions related to fixed assets and the related GL accounts. This makes reporting easier, and you can specify exactly how you want different types of transactions and different subgroups to behave.

I can also set up separate locations. These are not inventory locations; these are separate fixed asset locations, and you can see those listed here. I’ll select one. I can also add a serial number if I want to. I can add a picture if I want to, so let’s import this one here. There we go. I’ve got my asset set up and I’ve got a picture of it. If I wanted to, I could add attachments. If I had a vendor quote or a vendor invoice, I could add it here. For now, I’m just manually entering this new fixed asset, and the depreciation book will automatically populate based on the fixed asset setup. I’ve got that here. This is the posting group; we’ll take a look at that later. Then I can enter the depreciation start date. It’s a seven-year asset. I’ve got different depreciation methods—these are the ones I have in my system. I use straight line for my corporate book, but I also have some tax books that I might want to use, and I’m using a declining balance for those.

I have some additional fields at the bottom that I can fill in if I wish. I can identify the vendor from whom I purchased this. I can also identify a maintenance vendor if I want to do that, and I can identify service dates and warranty dates. All that information is on the Fixed Asset card. If I have rolling stock, I can add that information here as well. This information here has to do with trucks going into Mexico, so we’ll leave that as it is. This is now a fixed asset in my system. There’s an additional step that needs to take place—that’s called Acquire. I’ve got the information; now I need to acquire it. We’ll do that later. It’s kind of a purchase transaction; it basically says where I got this asset from. We’ll take a look at that later, so we’ll leave this as it is. If I go back to my list, we can see that the asset has been added to the system. It still has not been acquired; it needs to be acquired. You can see that toggle right here. It needs to be acquired, and we’ll do that later. So that’s one way to add an asset into the Fixed Asset system.

Copying an Existing Fixed Asset

Next, we’ll take a look at copying an existing asset. Let’s copy this asset right here and open it up. This laptop is already in my system and it’s been acquired. We can take a look at the transactions and open that up. This is the invoice transaction on which it was purchased. I want to copy this asset. It’s easy to do. I’ll hit Copy Fixed Asset. I can make a number of different copies if I want to, which I might do if I’ve ordered, say, 50 laptops and want to add all of them as separate items. I will use this default number here and say OK. Now, if I look at my fixed asset list, I can open the new asset. You can see it here. I’m going to change the serial number, but it takes on the attributes of the asset we copied it from. We’ve got the picture there, and if I had specific documents related to the purchase of this asset, I can add them as attachments.

I’ve got the depreciation books, and I’ve got my straight-line book here. This is my company book—this is the one from which I record actual GL entries, and they’re posted to this book. I’ve also got two separate tax books. They’re here because they were copied from the other asset. I can delete those if I don’t want them on this particular asset, but I’ll keep them. Again, this needs to be acquired, and we’ll do that later. That is the second way we can acquire assets in Business Central: copy an existing asset, bring all the attributes into a new asset, and go from there.

Acquiring Assets with Purchase Orders

Next, let’s look at the purchasing function and how we can add new assets with the purchase order and the purchase invoice. Let’s add a purchase order here. Here’s the vendor from whom we’re purchasing this asset. Let’s fill this out. Now for the detail lines, I’m going to have a different type of detail line for this particular purchase order. If I open this up, I can add a fixed asset here. I’m going to do that. I’m not adding an existing fixed asset; I’m adding a new fixed asset, so let’s go to that dialog. This is basically the same dialog we walked through for manually adding an asset, and that’s essentially what we’re doing here. Let’s add this asset. I’m adding the asset here, but I’m not putting in a book value because that needs to be added through an acquisition transaction. This purchase order, when posted, will act as the acquisition transaction. I’m pretty much done with this, so let’s hit OK.

Now if we go back to our fixed asset list, we can see that this fixed asset has already been added to the list. Let’s open it. It needs to be acquired. We’re in the process of acquiring it because we have this in a purchase order. I’m finishing up the line of the purchase order. You’re going to specify the quantity and the cost. This cost will become the purchase cost of that fixed asset. This becomes the acquisition transaction, and when we post this, we’ll get a transaction for this asset. This is all I need, so I’m going to go ahead and post this and receive and invoice it.

Let’s take a look at that asset now. Here’s the asset we just added through the purchase order. This has been acquired through the purchase order; the toggle is grayed out and switched. Let’s go down and look at the book value. Open that up and we’ll see the transaction from which this was acquired. We can take a look at this transaction and find the entries related to this. We’re going to have a number of different transactions. Here’s the invoice itself. These are the General Ledger entries that were made—you can see those right here. The GL accounts assigned to this transaction were based on the Fixed Asset Posting Group that was assigned to the Office Equipment subgroup. You can see the fixed asset entry right here. So this fixed asset is fine; it’s been purchased, it’s been acquired, and it’s ready to go. It has depreciation set up for it, and you can take a look at that here. This fixed asset is ready to go; it’s been acquired; I’ve got a depreciation book set up for it. This is set from the fixed asset setup. This is the company book—this is the one I want because this is the book on which I calculate depreciation and send that to my General Ledger.

Acquiring Assets with Purchase Invoices

Let’s take a look at another method for acquiring an asset: purchase invoices. Let’s create a new one here. I’m going to do a couple of things. I’m going to add a new asset on this purchase invoice, and I’m also going to pay for an existing asset that we added manually. So let’s do that. We’ll add a new asset; it’s a tangible item. The subclass code will be Office Equipment, and we’ll find the location for it. Put the serial number in here. I’m adding a new asset on the purchase invoice, and it’s been added. If we looked at the fixed asset list, we would see that asset there. Let’s put in the price, and now I want to acquire one of the assets we added manually.

It’s going to be a fixed asset–type line here. I can look up the asset—these are all the assets in my system. We’re not adding a new one because we already added the asset; we just want to acquire it. At the bottom, I’m going to acquire this HP laptop. This is an asset that we set up by copying another laptop, so let’s select that. What I’m doing here is establishing the cost of this HP laptop with this purchase invoice and adding a new asset on the first line, while also showing the cost of that new asset. One of the things I really like about Business Central is the new Preview Posting functionality on most transactions. Let’s take a look at Preview Posting. This is especially helpful when I don’t do this type of transaction on a regular basis or when it’s a more complicated transaction. I can run Preview Posting and see what I’m going to get when I post it.

Let’s open the GL entry. You can look at these account numbers—that’s exactly where I want it to go: Accounts Payable, and this is an invoice, so that makes complete sense to me. I can also look at the Fixed Asset Ledger. It includes two acquisition transactions: the one we added on the purchase invoice plus the one we previously added by copying another asset. That’s exactly what I want. I’m going to go ahead and post this, and we’re done. Let’s take a look at these assets. Here’s the one we previously copied. We can open it—it now has a book value. We can drill down and see the transaction. This is the invoice that we just created and posted. We can also look at the server network card; this is a new asset that we added on the purchase invoice. We also paid for it, so I’ve got a book value on that as well. We can see that here and drill down to get all the information we want on this transaction.

Importing Fixed Assets from Excel

Next, I want to add a number of assets by importing them with Excel. This is really easy to do. We’re going to go up to Edit in Excel, take this list—which is a fixed asset list—and download it into Excel. This is my entire asset list, downloaded from Business Central. You can see it in Excel. I can make changes here and publish them back into Business Central. What I want to do is add a number of assets easily in this Excel spreadsheet and then publish back to Business Central. I have a list of lab equipment I just purchased, and I want to add it to my fixed asset listing. Let’s do that. I’ll copy from this list and paste it into Edit in Excel. I can add some additional information here. Business Central is going to add the fixed asset number when I publish this back. I’m going to take these values here, copy those in, and that’s all I need.

I can now add this into Business Central by clicking Publish. You can see the notice that it’s been properly updated. I’m done with this worksheet, so I’ll exit it. I’ve got the new assets—let me refresh this list. These are the assets I just added by importing them from Excel. Let’s look at one. This asset still needs to be acquired; we’re going to do that next. You can see I’ve got the basic information here. I need to add the depreciation starting date, but I’ll leave this as it is. We’ll add that later, because now I want to focus on the acquisition piece.

Acquiring Imported Assets via Purchase Invoice

We’ve added these assets—there are eight assets here—and I’m going to acquire them through a purchase invoice. I’ll create a new purchase invoice, look up the vendor, enter that information, and specify the individual assets that were already added to the system to show them being acquired and paid for. I can do this in the purchase invoice or the purchase order; you can also do it in the Fixed Asset Journal (Ledger Entry). This one is simpler and more straightforward, and it’s probably similar to the type of transaction you might do.

So let’s add a line here and choose the fixed asset—the microscope. I’ve added these eight assets to my purchase invoice; these are assets we imported, and now I’m doing the acquisition piece. I’ll scroll over and do the costing. We’ve got the purchase amounts from the vendor’s invoice, the quantities, and the different items listed—the existing fixed assets. I’m going to go ahead and post this after looking at the Preview Posting list to make sure it’s what I want. You see these options here: the fixed asset account and the payables account—that’s what I want. We can see it’s going to process the acquisition transactions for these eight assets. I’m good with this, so let’s post it now. These eight assets have been acquired. You can see the Acquired toggle switch set here; this is ready to go, as are the others in this group.

Let’s go back and look at our fixed asset list. You can see the assets listed here. We’ve got the Acquired toggle. Here’s one that has not yet been acquired; we need to acquire it, so let’s look at that.

Acquiring Assets Using a Clearing Account

For this one, we can acquire it right from here; it will create a General Ledger transaction. Let’s do that, and I’m going to do this a little differently. I’m going to use a Fixed Asset clearing account. I’ll select that here and hit Next. I’m going to put the acquisition cost in and enter the acquisition date. Let’s go to Next. It’s going to open up the Fixed Asset General Ledger transaction. Let’s open that. You can see I’ve got a Fixed Asset transaction here and also the General Ledger transaction. The FA clearing account becomes an account on which I can clear; I can look at all my purchases that have been acquired. If there’s anything sitting in that account, it’s a notification that I need to clear it. Let’s go ahead and post that.

Disposing and Retiring Fixed Assets

We looked at several different ways to add an asset to the Fixed Asset system in Business Central. Now let’s look at the disposal or retirement of those assets. To retire an asset from Fixed Assets in Business Central, we’re going to use the Fixed Asset G/L Journal. Let’s open that up. Here we look up the asset we want to retire—this is the one I want to retire right here; it’s this laptop. It’s going to be a Disposal type. I enter this Fixed Asset line, and I can hit “Insert Fixed Asset Bal. Account.” It’s an easier way to do it; it also creates the transaction for me and verifies that it’s been done.

Again, this is an unusual transaction for me, so I’m going to Preview the posting. Let’s take a look. There are a number of things going on: I’ve got the sale right here; it’s recognizing the sale for $1,400; it’s backing out the original cost of this HP laptop; it’s calculating the gain or loss on this laptop in the first line; and it’s backing out the depreciation. That’s a lot of activity happening on this disposal entry, but this is what I want, so I’m going to post this. And that’s it. I’ve disposed of that entry. I’ve made all the entries in my General Ledger that I need to, and also updated the Fixed Asset listing.

Fixed Asset Posting Groups

Next, let’s take a look at the Fixed Asset Posting Group. Here I’ve got all the fixed asset codes in my system in Business Central—you can see those down this column. Across the top, I have the different transaction types that I can process in Business Central, and in the grid, the individual GL accounts that are going to be used when these types of transactions are processed in the system. Out of the box, this grid does not have a lot of these columns. I had to add these columns, but you can easily do that with Personalize. If I go to Personalize, let’s look at other fields that are available. You can see that this screen has a lot of other fields; I just add the ones that I need.

During system setup, we’ll add these for you, and as you use the system and try different types of transactions, you may come across a transaction type for which you do not have the GL account code. It’s easy to add it right in this table.

Summary and Next Steps

This was an in-depth look at two different types of transactions in Fixed Assets in Business Central. We looked at five different ways to add assets to Business Central. We went through the acquisition phase and what that means to Business Central. Then we looked at the disposal and retirement transaction that’s built into Business Central. Finally, we looked at the Fixed Asset Posting Group that helps Business Central decide which GL accounts to use for the different types of transactions. If you’re ready to deploy Copilot in Microsoft 365, download our free guide using the link in the video description.