Microsoft Dynamics 365 | Fixed Assets Business Process in Business Central

I want to run through a complete business process for fixed assets in Dynamics 365 Business Central. It’s essential to maintain a detailed record of your assets. I’m going to acquire an asset, adjust the value of that asset, calculate depreciation on it, and then, at the end, dispose of that asset. We’ll see a complete life cycle of a typical fixed asset that you can manage in Business Central. So let’s get started.

Adding a New Fixed Asset

This is my current list of fixed assets. I’m going to add to this list. There are several ways that I can add to it, but what I’m going to do is create a purchase order for a new piece of equipment.

Creating a Purchase Order

Here’s the vendor from whom I’m going to buy this new piece of equipment. The lines on the purchase order allow me to select a fixed asset that I can add to the system. I’ll click on “new” and put a description of the new asset. I anticipate that I’ll be able to put this piece of equipment into service on the first day of November, and this is going to have a seven-year life.

Receiving the Asset and Updating Records

I could always add this information later, but I might as well do it now because I know what that information is, so I’ll hit OK and then finish up the PO. So here’s the purchase order that purchased this new fixed asset.

Receiving and Recording

What I’m going to do is receive the new fixed asset into my organization. I’m also going to enter the vendor’s invoice into my accounts payable system. I’ll put in the vendor’s invoice number. Everything else looks right. So I’m going to go ahead and post this.

Asset Maintenance and Records

Let’s go back to the fixed asset list. I’ve added this new item here. We can open that up. It’s already been acquired through the purchase order process. I can add additional information if I need to do that. I may want to add the contract or some additional information about this particular purchase or this piece of equipment.

Maintaining Asset Information

I’m going to leave this as it is. You can see from the asset card that I can drill down on the book value, and I get a complete audit trail of this particular asset. Here I can find the entries, and it shows me that it came in on this particular purchase order and purchase invoice. I can see the information right here. The link is retained in the fixed asset information.

Adjusting Asset Value

Let’s say some time has passed, and it turns out that this piece of equipment needs to be written down a little bit. The technology has advanced, and the piece of equipment that I purchased is worth less than the current book value, so I’m going to write it down by $12,000. I use this journal here.

Value Adjustment

I’ve got different posting types. You can see that here; this is going to be a write-down. I’m going to go ahead and post that. So if I have an impairment in value on my fixed assets, it’s easy to adjust to reality. I can do that right within the system.

Depreciation Calculation

On a periodic basis, I’m going to calculate depreciation on all my fixed assets, create an entry for that, and post it to the general ledger. This is an automated process. Let’s take a look at it.

Automated Depreciation

Going to calculate depreciation. This process goes out, looks at my fixed asset records, and will determine the appropriate depreciation. Let’s go ahead and do that.

Asset Disposal

I’m going to open up the journal here. I’m going to post this. Looking at the fixed asset card for this new piece of equipment, I can drill down on the book value and see all the transactions. We see the original acquisition here, the write-down we did, and then a depreciation for one month as we process additional transactions against this fixed asset; we’re going to see those transactions here.

Disposing of an Asset

Later in the following year, we’re going to dispose of this asset. I’ll put another transaction in. We can see that here. This is a disposal transaction. I’m going to get $160,000 for it. So let’s go ahead and post that.

Posting the Disposal

Let’s go ahead and look at the preview posting and see what’s going to happen, and what we can see is it’s going to back out the accumulated depreciation. It’ll come back out the equipment amount, recognize the loss on it. I’m going to go ahead and post that, and when we receive payment for this, we can show that offsetting loss on this asset disposition. This was an example of a complete fixed asset business process in Dynamics 365 Business Central. We maintain the asset records. Through that, we acquired an asset we needed to adjust the value. We calculated depreciation, and then at the end, we dispose of that asset.