CONTENT

01. OVERVIEW

The Asset Extension routine (ATFA155) makes it possible to increase the asset's useful life, value, or both. Thus, the table of asset Balances and Accounting Data is normalized by creating the type of Asset 11 - Extension.

a. Legal Concept

The Revenue tax law explains that expenses with repair, conservation, or replacement of parts and pieces of the fixed assets of the legal entity which result in an increase in the useful life of the asset must be activated to serve as a basis for future depreciation, as long as this increase in useful life is greater than one year.

Extensions and renovations of assets already capitalized can be added to them and have the monthly depreciation value increased and the term maintained, or they can be considered separate items and have their own depreciation, thus lengthening the life of the asset. This choice can be made according to the company's economic interest, that is, its need to generate expenses.

b. General Concept in the routine

This routine enables you to increase the asset value, changing its useful life or not. Thus, the table of asset Balances and Accounting Data is normalized by creating the type of Asset 11 - Extension.

In the Extension concept, you can change values and extend the lifetime by at least one year, which can be entered as an expense and fully amortized in the current fiscal year.

In the Incorporation concept, assets are added to the existing structure with the same characteristics, but with a new sequential item code in the same base code.

c. Standard Entries Used

This routine contains the following standard entries; it is necessary to have registered an Asset and the respective Standard Entries:

02. Scenarios

In the extension routine, we have the following options:

Action

Useful life: This determines that the only action taken by the system is to increase the useful life of item type 01. For this case, the values selected in the Method and Useful Life Type fields are discarded.

Value: This determines whether actions taken by the system are for Extension or Incorporation. For this case, you must enter, in Asset Data, option Incorporation, the value in currency 1 (Orig Val C1).

Both: Both actions are taken by the system.

Method

Same asset (Type 11): Extension as an item of existing asset form. An item of type 11 – Extension is created.

New Asset (Incorporation): Adds a new asset form type 01 with the same base code and sequential item. It is associated through the fields N1_BASESUP and N1_ITEMSUP, indicating all assets that are in the same structure.

Same asset (Type 01): Value assigned to the method field automatically and used only when the Action field receives the value 1= Useful Life. In this case, the field will be disabled for editing.

Useful life Type

Associated: The annual depreciation rate of item type 01 is used as a basis. With the depreciation calculation transactions, annual depreciation rates are generated, in which the useful life of the asset ends together with item type 01. This option calculates the depreciation rate of the new item 11 or the new capitalization based on the useful life of the original asset.

Proprietary: When you choose this option, you must enter, in Asset Data the option Incorporation, the annual depreciation rate must be in currency 1, and the calculation currency of the asset. This rate is used for the new item or incorporation.

Useful life

This field is only considered if the Action field is filled out with the value of Useful life or Both. The value to be entered in this field must be at least one period (12 months or 1 year according to the MV_CALCDEP parameter) more than the value of the Current Useful Life (Display Only field).

03. Related Information

Tables:

• SN1 – Fixed Asset File;
• SN3 – Balances and Values File
• SN4 – Fixed Asset Transactions  

Routines Involved:

 04. OTHER REFERENCE DOCUMENTS 

Information on the Depreciation Calculation
About the Asset Extension routine
Calculation used in the Depreciation Rate

Change in depreciation rate (ATFA230 - SIGAATF)

04. MENTAL MAP