How to Consolidate Fixed Assets: Impact on Book Value, Depreciation, and Useful Life

Explanation of how to merge fixed assets to add value to the base asset and merge depreciation with the possibility of increasing the useful life.

• Merging Fixed Assets: is merging assets or properties into the base asset to increase its value and merge depreciation with the possibility of increasing the useful life of the asset.

How to Merge Assets:

1. Go to the Fixed Assets section and then select Additions.

   

2. Click on “Add New”.

3. Select “Merge Assets”.

   

4. Select the Base Asset into which assets will be merged:

   • Addition Reference: is filled automatically.
   • Asset Classification: choose the base asset classification.
   • Asset Name: choose the asset to be merged.
   • Registered Asset Reference: specify the asset that will be merged.
   • Addition Date: specify the date of adding the assets through the merger.
   • Description: can be added optionally.
   • Registered Asset to be Merged: the asset will be archived and its status will become “archived” with status “merged” and you will not be able to use it separately after that.

5. Asset Information:

   • Serial Number: to display additional details about the asset.
   • Receipt Date: to determine the start of depreciation calculation.
   • Accumulated Depreciation to Date: shows the depreciation recorded until the addition date.
   • Unrecorded Depreciation Until Addition Date: the value of unrecorded depreciation.
   • Book Value: shows the book value of the fixed asset until the addition date (unrecorded depreciation value does not appear)

     

6. After Reviewing Assets:

   • Determine if the addition will increase the useful life of the asset; additional years can be added.

     

   • Specify the Depreciation Account: if the asset is depreciable.
     • Recorded Depreciation: unrecorded depreciation until the addition date is calculated.

       

     • Manual Depreciation: allows you to add a value manually.

       

7. After reviewing the values, you can save and merge the assets or save them as a draft to complete later.

Impact of Merging Assets on the Base Asset:

• Increase in Value: the value of the base asset will increase (by the fixed asset value), depreciation, and scrap value.

  

• Increase in Useful Life: depreciation will be calculated on the new value and useful life of the asset.

  

• Merged Asset: will become archived after being merged with the base asset.