Fixed Asset field guide

A Fixed Asset record explains what the company controls, where it is, who is responsible, how it was acquired, how it is depreciated, and what happens when it is transferred, impaired, disposed, or replaced. Use Demo Retail Group LLC and asset FA-DXB-004281 while practising.

Asset header fields

Open Finance → Fixed Assets → New.

Field	Example	Purpose and impact
Asset number	FA-DXB-004281	Immutable register key
Asset class	Cold-storage equipment	Account and policy defaults
Description	2–8°C refrigeration unit	Identification
Legal company	Demo Retail Group LLC	Ledger boundary
Branch/location	DXB-FC-01	Custody and reporting
Custodian	Warehouse manager	Accountability
Serial number	REF-88310	Physical traceability
Acquisition date	2026-09-17	Capitalisation evidence
In-service date	2026-10-01	Depreciation start
Acquisition cost	AED 240,000	Gross asset value
Residual value	AED 12,000	Depreciable base
Useful life	10 years	Depreciation schedule
Method	Straight-line	Period expense
Status	CIP / active / disposed	Lifecycle gate

Other fields include supplier, purchase invoice, project/WBS, funding source, grant, warranty, insurance, barcode, tax, lease flag, component, and impairment indicator. In-service date requires acceptance or commissioning evidence.

Class and accounting defaults

Asset class maps cost account, accumulated-depreciation account, depreciation expense, disposal gain/loss, impairment, useful-life policy, method, calendar, and approval route. A class is a default, not permission to capitalise every purchase.

An asset costing AED 240,000 with AED 12,000 residual value and 10-year straight-line life depreciates AED 1,900 per month if the policy uses 120 monthly periods. Store rounding and convention explicitly.

Components and major repairs

Component detail records parent asset, component type, serial, cost, useful life, method, in-service date, and replacement rule. A compressor with a separate 5-year life may be a component. Replacing it derecognises the old component and capitalises the new one only after approved technical evidence.

Routine repair is expense. A major overhaul that extends useful life requires capital-project or engineering approval and a component decision. Never capitalise labour or parts simply because the invoice is large.

Capital project and construction in progress

Capital project fields include project, WBS, budget, start/end, asset class, funding, contractor, currency, and commissioning gate. Costs accumulate in construction-in-progress (CIP) from approved POs, receipts, invoices, labour, and allocated overhead.

At commissioning, transfer eligible CIP to asset cost with project, certificate, date, and approver. Non-capital or abandoned cost is reclassified with reason. CIP should not depreciate before in-service date unless policy explicitly requires it.

Depreciation schedule

Schedule fields include asset/component, book, company, method, life, residual, convention, start date, period, opening cost, opening accumulated depreciation, current depreciation, impairment, closing NBV, and status. A change in life or method is a controlled estimate change with effective date and reason.

Month-end depreciation posts debit depreciation expense and credit accumulated depreciation by asset class, branch, cost centre, project, and book. A closed period cannot be recalculated without a documented adjustment.

Transfers and custody

Transfer fields include asset, old location, new location, old custodian, new custodian, request date, effective date, reason, transport, condition, and approval. A legal-company transfer may require inter-company sale or transfer pricing; a branch move within one company normally changes location and dimensions only.

The asset register and physical count must agree. A transfer does not change gross cost unless an approved accounting event says so. Keep handover evidence and acknowledgement.

Impairment and revaluation

Impairment records asset, indicator, assessment date, carrying amount, recoverable amount, method, evidence, loss, reversal policy, and approver. A damaged refrigeration unit with recoverable amount AED 160,000 against NBV AED 190,000 creates a controlled AED 30,000 loss.

Revaluation, where supported by policy, records valuation date, fair value, reserve, source, and approval. Do not use revaluation to conceal a missing disposal or incorrect depreciation.

Disposal and retirement

Disposal fields include asset, disposal date, reason, method, buyer, proceeds, tax, accumulated depreciation, impairment, approval, and evidence. On disposal, remove gross cost and accumulated depreciation, record proceeds, and post gain/loss. A sold asset must not remain active or depreciating.

For an asset with cost AED 240,000 and accumulated depreciation AED 100,000 sold for AED 155,000, carrying amount is AED 140,000 and gain is AED 15,000 before tax. The journal should show each component, not a net unexplained entry.

Leases and right-of-use assets

Lease fields include lessor, contract, commencement, term, payments, escalation, discount rate, currency, liability, right-of-use asset, renewal option, and modification. Lease schedules separate principal, interest, depreciation, and FX. A lease modification creates a version and approval; it does not overwrite historic payments.

API and audit mapping

API create requires company, class, acquisition or CIP source, cost, currency, location, in-service date, life, method, and idempotency key. Return asset ID, number, status, schedule ID, and journal references.

{"companyId":"company_uae","assetClassId":"cold_equipment","description":"2-8C refrigeration unit",
 "acquisitionCost":"240000.00","currency":"AED","residualValue":"12000.00",
 "usefulLifeMonths":120,"method":"STRAIGHT_LINE","locationId":"warehouse_dxb","inServiceDate":"2026-10-01"}

Audit evidence includes source invoice, project, acceptance, capitalisation, depreciation changes, transfer, impairment, disposal, user, approval, and timestamps. Restrict asset exports where serial, location, or security information is sensitive.

Reconciliation and practice

Reconcile asset register to GL cost, accumulated depreciation, CIP, depreciation expense, leases, insurance, physical count, project close, tax, and disposal proceeds. Exceptions include active asset without location, depreciating asset without commissioning, CIP past completion, duplicate serial, and disposed asset with open maintenance.

Practice: create an asset from a purchase, accumulate CIP, commission it, run depreciation, transfer branches, record a component replacement, impair it, dispose it, and reconcile gain/loss. Explain every field, precision, owner, permission, status, journal, tax, FX, API ID, and evidence. Then attempt to depreciate a CIP asset and dispose an asset with an open work order; prove both controls reject or route the action.

Related: Journal Entry field guide, Purchase Order field guide, Projects workflow, Advanced GL Mapping, and API cookbook.