Managing Asset Classes

In the lively environment of the Bike Company, talent isn't overlooked for long. Mike, a thoughtful supervisor, decides to have a chat with Kevin, a diligent hire who's only been with the company for a few months. Throughout their conversation, it becomes apparent that Kevin's hard work and passion haven't gone unnoticed by Mike. The time has come for Mike to offer Kevin an exciting opportunity that would not only test his skills but also help him grow and learn even more.

To embark on the journey with him, start the video below.

Kevin initially plans to separately identify the new special machines in the balance sheet. According to local accounting regulations, the depreciation of the special machines is scheduled for 10 years while, according to International Financial Reporting Standards (IFRS), the depreciation is 5 years. To link the new inventory or value adjustment accounts with the special machines, a new asset class is needed. Kevin first checks the functions of the asset class.

The asset class influences several aspects of the fixed assets, such as:

• Structuring: The main purpose of an asset class is to structure evaluations such as the asset history sheet, asset list, and balance sheet.
• Numbering: Depending on the asset class, each asset receives a unique number to identify it within the system.  Each asset class is connected to a number range. When you save your entries in the master record, the system automatically assigns an asset number based on the asset class number range. 
• Account Determination: The values of each of the assets need to transfer to the balance sheet. The asset class contains an account determination key that determines the correct balance sheet accounts.
• Screen Layout: It also determines the structure of the master record - that is, which fields in the asset master record must be filled, which fields are ready for input, and which fields are hidden.

Feeling motivated, Kevin starts working, but he can't find an app to create a new asset class. He decides his next best move is to seek out help, so he scours the company's internal employee portal. He finds the contact information for Maxine, a configuration expert. With her years of experience, she is certainly the right person to talk to. Wasting no more time, Kevin heads to Maxine's office.