How to Increase Fixed Asset Value by Linking Purchase or Simple Invoices and Its Impact on Useful Life

Here is an explanation of how to link a purchase invoice or simple invoice to a fixed asset to increase its value.

• You can add the value of a fixed asset or expenses to increase the asset’s cost by linking a purchase invoice or simple invoice.
• The invoice must contain fixed assets or non-inventory products or products of type expense, and the invoice must be in “Approved” or “Paid” status.

How to add an invoice to an asset:

1. Go to Fixed Assets – Additions.

   

2. Click on “Add New“.
3. Select the addition type: Link Purchase Invoice.

   

4. By selecting the primary asset in which the assets will be merged:

   • Addition Reference: Auto-filled.
   • Asset Category: Select the primary asset category.
   • Asset Name: Select the asset to be merged.
   • Registered Asset Reference: Specify the asset to be merged.
   • Addition Date: Set the date of adding the assets through the merger.
   • Description: Can be added optionally.
5. Enter the reference number: the invoice reference (purchase invoice or simple invoice).

   

6. Review the details of the added invoice.

   

Asset Information:

• Serial Number: To view the asset details.
• Receipt Date: The date when the depreciation calculation period begins is set.
• Accumulated Depreciation to Date: Shows the recorded depreciation up to the addition date.
• Unrecorded Depreciation up to Addition Date: Shows the unrecorded depreciation up to the addition date.
• Book Value: The book value of the fixed asset up to the addition date is displayed.

After reviewing the asset, fill in the following:

1. Increase in Asset Life: An optional choice if an increase in the useful life is expected.

   

2. Depreciation Calculation: If the asset is depreciable, you can specify the depreciation type:

   

   • Recorded Depreciation: Calculate the unrecorded depreciation up to the addition date.

     

   • Manual Depreciation: Add depreciation manually as desired.

     

     After calculating the depreciation, you can save and link the invoice or save it as a draft to complete later.

     

Impact of Addition on the Asset:

1. The value of the primary asset will increase (by the value of the fixed asset or the value of non-inventory products or the value of expenses after discount and before tax) as well as the depreciation and scrap value (after merging the values of fixed assets)

2. Increase in the useful life and depreciation calculation on the new asset value.
3. The registered asset in the invoice will be classified as an archived asset.
4. Reflection of the value of expenses and non-inventory products in the primary asset.