Load BC
This page enables the user to view the depreciation of the assets for that period, add impairment and the sale of assets.
The project asset schedule details will be populated from the BC form.
For all the assets, the asset details are recorded separately in the Asset Register in the BC form.
If the user does not choose FA register in BC form, then “Load BC” will not be applicable.
The asset class (L4) in FA Register will have the values where its corresponding L2 is “Non-Current Assets”.
The user will be able to add an impairment and sale of asset in “Load BC” module.
Impairment and the sale of assets for the same month is not allowed.
Impairment can be added for any day during the month.
Impairment can only be added once a month.
For example: If an impairment is added for August, another impairment for August cannot be added.
If an impairment is added for a month, then another impairment can be added for any month which is greater than already entered month.
For example: If an impairment is added for the month of August, then the next impairment can be added for any month greater than August, that is Sep, Oct, Nov and so on. But impairment cannot be added for July, June, May, and so on.
The assets are depreciated till the residual value. If the net book value reaches residual amount, then the asset cannot be depreciated further. However, an impairment can be added to these assets even if the net book value reaches residual value.
The net book value will never be negative.
So, the maximum impairment amount can be equal to the net book value.
For ex: If the net book value is 15000, then the maximum impairment amount can also be 15000 which will make the net book value 0. It cannot exceed 15000, which will make the net book value negative.
If the residual % is not entered, then the asset can be depreciated until the net book value becomes 0.
While this screen is relevant for corporate controllership terms it may be possible for a particular business acquisition C1 buying C11 (As C1 will own the operating location (BC C11) the corporate controller may want the finance controller of C1 to review and sign off the FV adjustments tangible and Intangible.
If the corporate controller delegates to the finance controller, then it would application near in the finance controller's overview screen as a specific consolidation task due to be completed.
Journal Entries:
The journal date will be the end date of the project and is prepopulated by the tool.
The journal entries in the Load BC module will be posted as follows:
L3 and L4
Dr
Cr
Retained earnings (L3 and L4) to be picked - From COA Questionnaire
Difference between Net book value on date of transition/ acquisition (from BC form - Asset Register and consolidate for all the assets) to Date of project start (opening balance in Load BC page of all the assets and consolidate)
L3 and L4 would be chosen from BC from
Difference between Net book value on date of transition (from BC Form - Asset Register) / acquisition to Date of project start (opening balance in Load BC page of the assets at individual asset level)
Conditions:
Only include BC forms where Date of acquisition is less than or equal to project end date.
For Ex:
In the asset register, if there are 2 assets. Below given is the asset class and net book value of the asset
Furniture – 10000
Building – 100000
If the opening balance of these assets in the project is 9000 and 99000 respectively, then the journal entry will be posted as follows.
Debit – (Net book value of all the assets) - (Opening balance of all the assets)
Credit - (Net book value of each asset) - (Opening balance of each asset)
So, the journal entry will be posted as follows:
Dr = (10000+100000) - (9000+99000)
Cr = 10000-9000
Cr = 100000-99000
Dr 2000
Cr 1000
Cr 1000
2.
L3 and L4
Dr
Cr
L3 and L4 would be chosen from BC form
DTL on transition- DTL on opening = Db DTL on transition
L3 and L4 from Retained Earnings (from COA Questionnaire)
DTL on transition- DTL on opening = DTL on transition
DTL on transition
FV of BC form FA register * BC form Tax rate
DTL on opening balance
Net Book Value on start date of project (Opening balance) * opening Tax rate
3.
L3 and L4
Dr
Cr
User selection
Depreciation (for class of assets to be consolidated - tangible & others from Load BC)
User selection
Amortization (for class of assets to be consolidated intangible from Load BC)
User selection
Impairment (common for all class of assets to be consolidated from Load BC)
User selection
FV on sale (common for all class of assets to be consolidated from Load BC)
BC form
Depreciation of each asset class (from Load BC)
BC form
Amortization of each asset class (from Load BC)
BC form
Impairment of each asset class (from Load BC)
BC form
FV on sale of each asset class (from Load BC)
4.
L3 and L4
Dr
Cr
L3 and L4 would be choosen from BC form
DTL on closing Net Book Value - DTL on opening Net Book Value
User Input
DTL on closing Net Book Value - DTL on opening Net Book Value
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