Assets classes: Accounting and Depreciation rules

Asset classes represent the categories of assets intended to be managed at the forecast level. In particular, these classes are used in the event that, during the simulation year, there are purchases or sales of assets. A series of details is defined for each class, as necessary in order to manage on a forecast basis the assets they represent, such as:

the depreciation type to be applied, with the respective rates
all of the accounts involved in the management in any way

Management of these models can be accessed from the administrator-user’s web interface, following the path Setup & Admin > Data processing tile > Cash Flow Planning > Assets classes: accounting and depreciation rules

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Every asset class is identified by:

a code. This identifies the asset class. In cases of $ entities it must always begin with the character $ in order to avoid overlapping with classes inserted by individual entities;
a description
an entity code. This identifies the entity. It is possible to select either the $ value in order to specify that the class is common to the group: it can be used by all Entities of the group or the actual Entity code in order to specify that the class can only be used by that entity;
Accounting model generated. NOT EDITABLE represents the code of the accounting model linked to the asset class. This model is generated automatically by the system when the asset class is saved and has a code made up of a “$IMM” prefix plus the asset class code.
a series of information necessary for calculating depreciation, such as
fiscal rate. Fiscal rate to be applied for the calculation of the depreciation of the asset related to the asset class
statutory rate to be defined if the user wants to manage a depreciation according to the statutory method
purchase year. Depreciation type applied in the asset purchase year. The possible choices are “Pro quote standard rate” and “Reduced rate”. In the former case, depreciation is calculated using the standard rate on a pro quote basis (relative to the year-start period / purchase date) based on the weight or in twelfths, while in the latter case it is calculated using the reduced rate
sale year. Depreciation type applied in the asset sale year. It is possible to apply the “standard” rate or to apply no rate; in the latter case the system will not calculate the depreciation for the year in which the sale of the asset is recorded. By applying a standard rate the system calculates the depreciation with the standard rate on a pro quote basis (relative to the year-start period / sale date) based on the weight or in twelfths
reduced rate. Rate utilised to calculate the depreciation in the first year of the asset's useful life in cases of “Standard” depreciation if the “Reduced Rate” option is enabled in the “Purchase year depreciation type” field
reduced statutory rate to be entered if the user wants to manage depreciation according to the statutory method in the first year of the asset’s life cycle if the “Reduced Rate” option is enabled in the “Purchase year depreciation type” field.
accelerated depreciation years. Duration of accelerated depreciation (including the purchase year), if provided for. After the indicated number of years, depreciation is calculated according to the “standard” rate
accelerated rate. Rate (generally double the tax rates) for the depreciation calculation if the user opts for “Accelerated” depreciation. The system uses this rate if the “Accelerated depreciation years” option is defined.
accelerated reduced rate. For accelerated depreciation, this is the rate utilised to calculate the depreciation in the first year of the asset's useful life if the “Reduced Rate” option is enabled in the “Purchase year depreciation type” field
last year. Depreciation type applied in the last year of the asset’s “useful life”. The possible choices are:
Pro quote standard rate. In this case the system applies the rates resulting from the “asset class" for all the periods until the residual amount is equal to zero; in particular, for the last period of depreciation, it inserts the residual value

Residual amount spread over all periods. In this case, in the last year of depreciation, the residual value to be depreciated is spread over all periods of the year, in equal amounts

weight for the monthly splitting of depreciation into twelfths. Weight to be used by the system to perform the monthly splitting of the annual amount of depreciation. If “None” is indicated, the system performs the monthly splitting into twelfths.

To manage an asset class, once the general characteristics have been defined, it is necessary to indicate all of the accounts which, for various reasons, are involved in the management of the assets that it represents. Management of such accounts is subdivided into two different tabs:

Asset accounts. This contains the definition of the accounts necessary for managing purchase / sale transactions and generating asset depreciation. In detail, these accounts are as follows:
asset. Standard balance sheet account identifying the asset
purchases billing. This indicates whether the asset manages purchase accounting, i.e. when the date on which the asset is loaded precedes the issuing of the invoice by the supplier. Purchase accounting is managed by activating this option.
accrued liability: debit. Variation balance sheet account on which to write off the accrued expenses in cases of assets purchased on an accrual basis (at the time of liability billing)
accrued liability: credit. Variation balance sheet account on which to book the accrued expenses in cases of assets purchased on an accrual basis (before liability billing)
asset: debit. Variation balance sheet account on which to book the sales of assets (or the transition from asset in progress to asset)
account payable: credit. Variation balance sheet account on which to book the recognition of the debit for the purchase of assets
account payable: debit. Variation balance sheet account on which to book the write off of the debit for the purchase of assets against a payment
bank: credit. Variation balance sheet liquidity account on which to book the payments for the purchase of assets
down payment: debit. Variation balance sheet account on which to book the down payments on the purchase of assets
down payment: credit. Variation balance sheet account on which to book the write off of the down payments on the purchase of assets (at the time of liability billing)
asset in progress: debit. Variation balance sheet account on which to book the purchases of assets in progress
asset in progress: credit. Variation balance sheet account on which to book the sales of assets in progress (or the transition from asset in progress to asset)
depreciation. Normal P&L account on which to book the depreciation of assets
depreciation fund: credit. Variation balance sheet account on which to book the depreciation of assets
sale billing. This indicates whether the asset manages sales accounting, i.e. when the date on which the asset is downloaded precedes the issuing of the invoice to the client. Sales accounting is managed by activating this option.
accrued income: debit. Variation balance sheet account on which to book accrued income in cases of asset sales on an accrual basis (before asset billing)
accrued income: credit. Variation balance sheet account on which to write off accrued income in cases of asset sales on an accrual basis (at the time of asset billing)
account receivable: debit. Variation balance sheet account on which to book the recognition of the credit for the sale of assets
asset: credit. Variation balance sheet account on which to book the sales of assets
bank: debit. Variation balance sheet liquidity account on which to book collections for the sale of assets
account receivable: credit:. Variation balance sheet account on which to book the write off of the credit for the sale of assets against a collection
depreciation fund: debit. Variation balance sheet account on which to book the write off of the depreciation fund in cases of an asset sale
down payment: debit. Variation balance sheet account on which to book the write off of the down payments on the sale of assets (at the time of asset billing)
down payment: credit. Variation balance sheet account on which to book the down payments on the sale of assets
capital loss. Normal P&L account on which to book the capital loss resulting from a sale of assets
capital gain. Normal P&L account on which to book the capital gain resulting from a sale of assets
Leasing accounts. This contains the definition of the necessary account if the assets are purchased through leasing. In detail, these accounts are as follows:
Lease fee. P&L account that identifies the leasing fee
Interest expenses. P&L account used to book interest related to leasing.
Account payable v/lease company: credit/debit. Variation balance sheet account on which to book, in the former case, the recognition of the debit incurred by the purchase of assets by leasing or, in the latter case, the write off of the debt against payment of the fee
Leasing deferred account: debit/credit. This is the variation balance sheet account on which the following are booked:
in the former case, the ACCELERATED periodic leasing fee and the calculation of the related interest (accelerated leasing interest) where the financial event occurred in the current period, but must be attributed to a subsequent period on an accrual basis
in the latter case, upon the booking of the leasing fee which, on an accrual basis, should be attributed to the current month, the write off of the previously booked prepaid expenses quota is registered
Leasing accrual account: debit/credit. This is the variation balance sheet account on which the following are booked:
in the former case, the DEFERRED periodic leasing fee and the calculation of related interest (deferred leasing interest) that must be attributed to the current period on an accrual basis, even if the financial event occurs in the following months
in the latter case, when the payment of the monthly fee and relative interest is paid, the write off of the relative portion of the leasing fee previously attributed on an accrual basis to a previous period is registered

Based on what is defined for the asset class, the system automatically creates the relative accounting model on saving. The model created cannot be modified by the user and is specific to the asset class defined.