Entering a Revaluation record
You can enter records to the Revaluation register in two ways:
- Directly to the Revaluation register in the Assets module; and
- Using the 'Revaluate Asset Acquisition Value' Maintenance function.
This method uses the Revaluation Factors and Revaluation Run Lists settings. You can use it when you need to create Revaluation records for several Assets at once, and it should also be used in countries where Assets are revalued periodically on state authorisation (usually because of inflation).
The first of these alternatives is described here: the same screen is used in each case. Please refer to this page for full details about the second alternative.
To open the Revaluation register, ensure you are in the Assets module and select 'Revaluations' from the Registers menu or click the [Revaluations] button in the Master Control panel.
The 'Revaluations: Browse' window is opened, showing Revaluation records already entered.
To enter a new record, click [New] in the Button Bar or use the Ctrl-N (Windows and Linux) or ⌘-N (Macintosh) keyboard shortcut. Alternatively, select a record similar to the one you want to enter and click [Duplicate] on the Button Bar.
The 'Revaluation: New' window is opened, empty if you clicked [New] or containing a duplicate of the highlighted Revaluation record. In the case of the duplicate, the Transaction Date of the new record will be the current date, not the date of the original one.
- Ser No.
- Paste Special
Select from another Number Series
- The number of the Revaluation record: Hansa will enter the next unused number from the first number sequence entered in the Number Series - Revaluations setting. You may change this number, but not to one that has already been used.
- Trans. Date
- Paste Special
Choose date
- In countries where a Nominal Ledger Transaction will be created from the Revaluation, specify the date of that transaction here.
- In most cases, this Date should be the same as the Starting Dates below, otherwise there is a risk that the Revaluation record will not be found by the depreciation calculation.
- Inventory No.
- Paste Special
Asset, Assets module
- Specify the Asset that is to be affected by this Revaluation record.
- Legal Code
- This field is only used in Revaluation records created by the 'Revaluate Asset Acquisition Value' Maintenance function. It will contain the Legal Code specified in the Revaluation Factor used by that function to create the Revaluation record.
- The Legal Code is used in some countries such as Russia and Portugal, where Assets can be revalued due to inflation. It is the serial number of the official authorisation of the revaluation. Revaluation records that have a Legal Code are usually referred to as "Official Revaluations" in Hansa.
- This field cannot be modified.
- Description
- If you entered the Revaluation directly to the Revaluation register, the name of the Asset will appear here once you have specified the Inventory Number. Otherwise, if the record was created by the 'Revaluate Asset Acquisition Value' Maintenance function, this fact will be recorded here instead.
- Starting Date 1, Start Date 2
- Paste Special
Choose date
- Enter the date on which the depreciation calculation using the revised specification in this Revaluation record is to start. A separate Starting Date can be specified for each Depreciation Model.
- For example, an Asset was purchased on 1/1/2004. Two Revaluation records were entered, with Starting Dates of 1/1/2005 and 1/7/2005. Depreciation will be calculated for 2004 using the specification in the Asset record, for the first six months of 2005 using the first Revaluation record, and for the second half of 2005 and thereafter using the second Revaluation record.
- It is recommended that the Starting Date should be close to the Transaction Date. When depreciation is calculated for a particular period, Hansa searches for Revaluation records whose Transaction Dates fall in that period and applies them from the Starting Date on. So, a Revaluation record will have no effect if its Starting Date falls within the period but its Transaction Date does not. A Revaluation record will also have no effect if its Starting Date is blank.
- Please refer to the description of the Start. Date 1 and 2 fields on the 'Models' card of the Asset record for a discussion about whether these dates should be the first of a month.
- Model 1, Model 2
- Paste Special
Depreciation Models setting, Assets module
- Specify here the Depreciation Models that are to be used from the Starting Date onwards.
- If you don't want to change the Depreciation Models, you can leave these fields blank. This will mean the depreciation calculation will continue to use the Models in the previous Revaluation or, if there are no previous Revaluations, the Models in the Asset record
- If you are using a Straight Line Depreciation Model, you should think about whether you need to change the Model when you revalue an Asset. For example, an Asset has a Purchase Value of 50000.00 and is being depreciated using a 5% Straight Line Depreciation Model. This means the Asset will be depreciated over a period of 20 years, at a rate of 2500.00 per year. When the Asset is five years old, it will have depreciated by 12500.00 to a value of 37500.00. If the Asset is revalued to 55000.00 at that moment, this in effect sets its Purchase Value to 55000.00. Its value after five years will then be 55000.00 - 12500.00 = 42500.00. If there is no change of Depreciation Model, it will be depreciated at a rate of 2750.00 per year, so its life will be extended slightly. If you want the life of the Asset to remain 15 years after the Revaluation, you should change the Model to 5.152% Straight Line. To calculate the new percentage, use the formula:
- percentage = (((new value - depreciation so far) / remaining life in years) / new value) x 100
- percentage = (((55000.00 - 12500.00) / 15) / 55000.00) x 100 = 5.152
- If you don't want to change the Model, you might consider calculating depreciation using the Start from Last Revaluated Value option. This option assumes that the original value of the Asset was 55000, and that it has already been depreciated for five years at a rate of 2750.00 per year. The remaining life of the Asset will be unchanged at 15 years. By treating the value in the latest Revaluation as the original Purchase Value of an Asset, this option effectively recalculates the depreciation from previous years retrospectively. Depending on advice from your auditor, you may need to record the change in depreciation in the Nominal Ledger.
- Start Val 1, Start Val 2
- Enter the depreciation base, i.e. the Asset Value to be used as the basis for the calculation of depreciation. You should determine this Value as follows:
- If you are using a No Depreciation method, the value is the current book value.
- If you are using a Straight Line depreciation method, the value should be the original Purchase Value unless the purpose of the Revaluation record is specifically to change the depreciation base (perhaps because of inflation).
- If you are using a Declining Balance method, you should enter the current book value after accumulated depreciation, again unless the purpose of the Revaluation record is specifically to change the depreciation base. You can obtain the current book value by producing a Depreciations Report for the Asset for the period up to the Start Date of the Revaluation record. Then Hansa will continue using the declining balance method correctly.
- If you do not enter a figure here, depreciation will continue to be calculated using the Starting Value in the previous Revaluation or, if there are no previous Revaluations, the Purchase Value in the Asset record. If you want the Revaluation to stop the calculation of depreciation, enter a zero value here (or check the Stop Depreciation box below).
- Starting Value 1 is used by the Depreciation Model specified in the Model 1 field, and Starting Value 2 by that in the Model 2 field.
- If the Quantity on the 'Owner' card of the Asset record is greater than one, this field should contain a figure for the Starting Value per unit, not the total Starting Value.
- New Res. Value
- The new Residual Value of the Asset. If you leave this field blank, the Residual Value from the previous Revaluation record for the Asset or, if there are no previous Revaluation records, the Residual Value from the 'Values' card of the Asset record will be used.
- If the Quantity on the 'Owner' card of the Asset record is greater than one, this field should contain a figure for the Residual Value per unit, not the total Residual Value.
- Rev. Factor
- Paste Special
Revaluation Factors setting, Assets module
- In the case of a Revaluation created by the 'Revaluate Asset Acquisition Value' Maintenance function, the Code of the Revaluation Factor that caused the record to be created will appear here. This field cannot be modified and is for information only.
- Cat.
- In the case of Revaluations created by the 'Revaluate Asset Acquisition Value' Maintenance function, the Asset Category to which the Asset belongs will appear here. This field cannot be modified and is for information only.
- Stop Depreciation
- Check this box if you would like to stop calculating depreciation of the Asset from the Starting Date of the Revaluation.
- This check box only takes effect in the latest Revaluation of a particular Asset. For example, an Asset is revalued in January and again in July, and the Stop Depreciation box is checked in both Revaluations. The July Revaluation will cause the Stop Revaluation box in the January Revaluation to be ignored and depreciation will be calculated to the end of June. If the Stop Depreciation box is not checked in the July Revaluation, there will be no interruption in calculating depreciation. If you still need the January Revaluation to stop the calculation of depreciation, set the Starting Value in that Revaluation to zero. In this case, if the Stop Depreciation box in the July Revaluation is not checked, the depreciation calculation will stop in January and resume in July.
- Comment
- Any comment about the Revaluation record can be entered here.
|
