Assets > Transaction Processing > Asset Revaluation

Asset Revaluation

You use this program to process revaluations for the book value of your non-current assets.

You can change the cost, residual value, depreciation code, depreciation start date and varying anniversary year where applicable, and also suspend depreciation for an asset.

Assets in SYSPRO are revalued in accordance with International Accounting Standards - IAS16. A change in the estimated useful life of an asset is treated as a change in accounting estimate. Depreciation is recalculated from day 1 of ownership of the asset and the net change profit/loss is realised in the current period.

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Field Description
Post

Select this to process the revaluation information you entered against the asset.

If your Assets Register module is integrated to the General Ledger (General Ledger Integration) then entries for Book value changes are created in the General Ledger distribution file in the current period. This is in accordance with International Accounting Standards - IAS8.

All depreciation to date is reversed and the depreciation book information is changed according to your entries.

The Revaluation date is used as the new Start date for depreciation.

The program uses the Revaluation date to check if depreciation adjustments are required. If so, then these adjustments are only created if the Basis for Depreciation is Period or Year. No depreciation adjustment entries are created if the basis for depreciation is Life of asset (Assets Register Setup).

Where applicable, the following entries are created and can be viewed in the Asset Query program:

  • REV - for the difference in asset cost to revalued cost.
  • RDP - for the reversal of any accumulated depreciation with a reference of "Revaluation depn B/F".
  • RDP - for the reversal of the balance of depreciation for each period of the current year with a reference of "Revaluation depn period nn" where nn is the period number of the balance.

  • RDP - for the date convention adjustment amount (if any) calculated for the asset with a reference "Revaluation depn period nn" where nn is the current period number. The narration is "Adjusted for date convention".

    Date convention adjustments are applied according to your selection at the Date conventions option (Assets Register Setup).

    Entries are created to adjust the Depreciation (expense) and Accumulated depreciation accounts in the General Ledger.

If you increased the Book value cost of the asset, then the following entries are created:

Dr Accumulated Depreciation Accumulated depreciation to date
Dr Asset Control Difference between old and new cost
Cr Revaluation Reserve Accumulated depreciation to date value plus difference between old and new cost

If you decreased the cost of the asset, then the following entries are created:

Dr Accumulated Depreciation Accumulated depreciation to date
Cr Asset Control Difference between old and new cost
Cr or Dr Revaluation Reserve Accumulated depreciation to date value plus difference between old and new cost.

i.e. The difference between the book value of the asset at the time it is revalued and the new cost value of the asset is journalized to the Revaluation Reserve account.
Asset Indicate the asset for which you want to process the revaluation.

The asset must have been acquired (Asset Acquisition) and cannot have been fully disposed (Asset Disposal).

Asset Revaluation

Field Description
Asset revaluation information  
Asset code This indicates the code of the asset you are revaluing.
Description This indicates the description of the asset you are revaluing.
Revaluation date

This defaults to the current period end date of the Assets module, but can be changed.

This date cannot be:

  • before the purchase date defined against the asset (Assets)
  • after the current period end date (Assets Setup)
  • in a prior year or period

This can be changed, providing it is within the current period.

The date you enter here is written to the Start date field against the asset (Assets - Book value tab) and is used as the new start date for depreciating the asset.

[Note]

Irrespective of the date entered here, the General Ledger distribution entries for Book value adjustments are created in the current Asset period.
Comment Enter free format comments relating to the revaluation of the asset.
Reason Indicate the reason for the revaluation.

A reason code must be entered in this field.

Revaluation reason codes are maintained using the Asset Reason for Revaluation program.
New asset costs
[Note]

Only depreciation books with a basis for depreciation of Period (Assets Register Setup) are available for editing.
Book value Enter the revalued Book value cost of the asset.
Tax Enter the revalued Tax value cost of the asset.
Alt valuation 1-10 Enter the revalued Alternate valuation cost of the asset.

Asset Revaluation Details

You use this editable listview to enter the changes to the various depreciation books.

The columns available to edit depend on the Depreciation code entered.

Field Description
Book This displays the depreciation books currently defined against the asset.
Depreciation code

This defaults to the depreciation code for the asset book (Asset Acquisition) but can be changed.

The depreciation code you enter here is immediately saved against the asset. This depreciation code is used to calculate the depreciation for the asset from this point onwards.

[Note]

If you change the depreciation code before processing the depreciation calculation for the current period (Asset Depreciation Calculation) then the code you enter here is used to calculate the depreciation for the current period.
Residual value Enter or change the residual value for the asset depreciation book.
Throughput EUL

Enter the estimated throughput value for the entire life of the asset. This is used for calculating the Statistical EUL depreciation amount.
Statistical GL code Enter the General Ledger code to which you will process the statistical throughput value for the current period. This ledger code must have an Account type of Statistical (General Ledger Codes).
Number of periods EUL

Enter the fixed number of periods over which the asset must be depreciated.
Number of years EUL

This indicates the fixed number of years over which the asset must be depreciated.
Remaining periods EUL This is calculated by the system.
Varying anniversary This option is only enabled if you entered a Depreciation code with varying depreciation.

Select S to set the varying depreciation rate according to the depreciation start date.

Select F to set the varying depreciation rate by fiscal year.
Suspend Select this to suspend (stop) depreciation for the asset book.
Cost/cash price This indicates the current cost value of the asset. This is changed by acquisitions processed (see Asset Acquisition).
Depreciation this year This indicates the amount depreciation for the current year to date.
Accumulated depreciation This indicates the total depreciation processed against the asset to date.
Current value This indicates the current value of the asset. This calculated as is Cost/cash price less Accumulated Depreciation.

Example

This example of an asset revaluation uses the following values:

  • Asset cost = 200 000
  • Depreciation = 20% per annum - straight line no varying depreciation
  • Accumulated depreciation opening balance is 120 000 (i.e. the asset is 3 years old at the beginning of the financial year)
  • Depreciation for the current year is 40 000

The asset is revalued at the end of the current financial year and is increased by 20 000. The revalued cost of the asset is therefore now 220 000.

The following transactions are processed by the system:

Dr Asset Control 20 000
Cr Revaluation Reserve 20 000
Dr Accumulated Depreciation 160 000 (120 000 + 40 000)
Cr Revaluation Reserve 160 000
Dr Depreciation Expense 3 666.67 (i.e. 220 000 x 20% /12)
Cr Accumulated Depreciation 3 666.67

The asset is carried at a revalued amount, being its fair value at the date of revaluation less subsequent depreciation, provided that fair value can be measured reliably. The revaluation of an asset changes its value at the current point in time to whatever the current measured value of the asset is. This is in accordance with IAS16.

When you process the year end, the system creates the following entries:

Dr Retained Earnings 43 666.67 (40 000 + 3666.67)
Cr Depreciation Expense 43 666.67

Notes and warnings

Restrictions and limits

  • Any depreciation book with a basis for depreciation of Period (Assets Register Setup) can be revalued, however only revaluations to the Book value depreciation book affect the General Ledger.

  • You cannot revalue assets in the current period once you have run the Asset Depreciation Calculation program for the current period and selected the Generate & update option.

eSignature considerations

Electronic Signatures provide security access, transaction logging and event triggering. This enables you to increase control over your system changes.

Access to the following eSignature transactions within this program can be restricted at Operator, Group, Role or Company level. You configure this using the eSignature Setup program.

eSignature Transaction Description
Asset Revalued

Controls access to the Asset Revaluation program.

Hints and tips

  • You can use the Entries function of the Asset Query program to view the revaluation entries made against an asset and you can generate the Asset List of Revaluations report to print details of revalued assets.

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