Executing the Procurement of Fixed Asset Process for Valuated Goods Valuated Goods

Objective

After completing this lesson, you will be able to procure fixed assets with valuated goods receipt

Asset Procurement Process for Valuated Goods Receipt

Kevin is interested in learning more about the options of valuated and non-valuated goods receipt. Online Kevin finds an overview of the activities that are part of the asset procurement process in materials management.

First, he takes a closer look at the description of the activities involved for a valuated goods receipt.

The figure outlines the Asset Procurement Process for Valuated Goods Receipt, consisting of five main steps: 1) Purchase Request (optional), 2) Purchase Order with Non-Valuated Goods Receipt set to No, 3) Goods Receipt where the asset acquisition is posted with the purchase order value on the debit side and the offsetting account is the GR/IR clearing account, 4) Invoice Receipt where the GR/IR clearing account is posted at the purchase order amount on the debit side, and adjustments are made if the net invoice amount differs, and 5) Payment (post-payment). Additionally, the asset master record is created, and the asset is acquired/capitalized.

The procurement process for acquisition with a valuated goods receipt is as follows:

If necessary, a purchase request is created.
An asset master record is created. A purchase order is created with the account assignment category, Asset (A).
In the Account Assignment section, the asset master record is linked to the purchase order.
In the Process Control section, the Non-Valuated Goods Receipt field is not selected.
The goods receipt is posted, and a Financial Accounting document is created. The asset is capitalized. The goods receipt date is the capitalization date of the asset.
The invoice receipt is posted, and a Financial Accounting document is created.
There may be a difference between the amount posted at goods receipt and the net invoice amount. In this case, the values of the asset are adjusted using adjustment postings.

Make Postings Integrated with Materials Management (Valuated Goods Receipt)

The Bike Company needs a new 3D printer. The asset master record has already been created for the printer. However, the asset master record must now be linked to the purchase order.

Monica shows Kevin the process of ordering and delivering the 3D printer.

The 3D printer has been capitalized at the order price.

Kevin now posts the invoice for the 3D printer. However, the invoice differs from the purchase order price.

The 3D printer is paid with a discount.

Kevin checks the impact of the payment with discount deduction on the value of the 3D printer.

Key Takeaways

Purchase requisition/purchase order: the asset accountant creates asset master record and assigns it to the purchase order.
Goods receipt: The asset is automatically capitalized at the purchase order value when the goods receipt is posted. The asset balance account is posted against the GR/IR account. The goods receipt date is the asset value date.
Invoice: If the invoice and goods receipt amounts differ, the correction is automatically posted to the asset.
Payment: Cash discount is automatically posted to the asset.
Year-end closing: All assets in use are capitalized.
Asset accounting must be included in the purchase order process using the workflow.

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