Fixed Assets Flow
Complete end-to-end documentation of Fixed Asset Management (FAM) in NetSuite - covering asset acquisition, depreciation, maintenance, and disposal.
In This Section
| Page | Description |
|---|---|
| Asset Types | Asset classification, accounts, and defaults |
| Asset Proposals | Auto-creation from PO, Bills, Expenses |
| Asset Creation | Manual creation, splits, components |
| Depreciation | Methods, schedules, multi-book |
| Asset Maintenance | Transfers, revaluation, impairment |
| Disposal | Retirement, sale, write-off |
| GL Impact | Journal entries and period processing |
| Reporting | FAM reports and saved searches |
| Best Practices | Guidelines and troubleshooting |
Master Flow Diagram
FIXED ASSET LIFECYCLE
═══════════════════════════════════════════════════════════════════════════════
┌─────────────────────────────────────────────────────────────────────────────┐
│ 1. ACQUISITION │
├─────────────────────────────────────────────────────────────────────────────┤
│ │
│ ┌──────────────┐ ┌──────────────┐ ┌──────────────┐ ┌────────────┐│
│ │ Purchase │ │ Vendor │ │ Expense │ │ Manual ││
│ │ Order │───▶│ Bill │───▶│ Report │ │ Entry ││
│ └──────────────┘ └──────────────┘ └──────────────┘ └────────────┘│
│ │ │ │ │ │
│ └───────────────────┴───────────────────┴───────────────────┘ │
│ │ │
│ ▼ │
│ ┌──────────────────┐ │
│ │ ASSET PROPOSAL │ │
│ │ (Auto-generated) │ │
│ └────────┬─────────┘ │
│ │ │
│ ┌─────────────┼─────────────┐ │
│ ▼ ▼ ▼ │
│ ┌──────────┐ ┌──────────┐ ┌──────────┐ │
│ │ APPROVE │ │ SPLIT │ │ REJECT │ │
│ └────┬─────┘ └────┬─────┘ └──────────┘ │
│ │ │ │
│ └──────┬──────┘ │
│ ▼ │
│ ┌─────────────┐ │
│ │ FIXED ASSET │ │
│ │ RECORD │ │
│ └─────────────┘ │
│ │
│ GL: Fixed Asset (Dr) | A/P or Cash (Cr) │
└─────────────────────────────────────────────────────────────────────────────┘
│
▼
┌─────────────────────────────────────────────────────────────────────────────┐
│ 2. IN-SERVICE │
├─────────────────────────────────────────────────────────────────────────────┤
│ │
│ Asset placed in service → Depreciation begins │
│ │
│ ┌──────────────────────────────────────────────────────────────────────┐ │
│ │ DEPRECIATION METHODS │ │
│ ├──────────────────────────────────────────────────────────────────────┤ │
│ │ │ │
│ │ ┌─────────────┐ ┌─────────────┐ ┌─────────────┐ ┌─────────────┐ │ │
│ │ │ Straight │ │ Declining │ │ Sum of │ │ Units of │ │ │
│ │ │ Line │ │ Balance │ │ Years' │ │ Production │ │ │
│ │ │ │ │ │ │ Digits │ │ │ │ │
│ │ │ Even spread │ │ Accelerated │ │ Accelerated │ │ Usage-based │ │ │
│ │ └─────────────┘ └─────────────┘ └─────────────┘ └─────────────┘ │ │
│ │ │ │
│ └──────────────────────────────────────────────────────────────────────┘ │
│ │
│ Monthly: Depreciation Expense (Dr) | Accumulated Depreciation (Cr) │
└─────────────────────────────────────────────────────────────────────────────┘
│
▼
┌─────────────────────────────────────────────────────────────────────────────┐
│ 3. MAINTENANCE │
├─────────────────────────────────────────────────────────────────────────────┤
│ │
│ ┌─────────────┐ ┌─────────────┐ ┌─────────────┐ │
│ │ TRANSFER │ │ REVALUATION │ │ IMPAIRMENT │ │
│ │ │ │ │ │ │ │
│ │ Move asset │ │ Fair value │ │ Value │ │
│ │ between │ │ adjustment │ │ decrease │ │
│ │ locations │ │ (up/down) │ │ (damage, │ │
│ │ │ │ │ │ obsolete) │ │
│ └─────────────┘ └─────────────┘ └─────────────┘ │
│ │
└─────────────────────────────────────────────────────────────────────────────┘
│
▼
┌─────────────────────────────────────────────────────────────────────────────┐
│ 4. DISPOSAL │
├─────────────────────────────────────────────────────────────────────────────┤
│ │
│ ┌─────────────────┐ ┌─────────────────┐ ┌─────────────────┐ │
│ │ RETIREMENT │ │ SALE │ │ WRITE-OFF │ │
│ │ │ │ │ │ │ │
│ │ Fully │ │ Sell with │ │ Early disposal │ │
│ │ depreciated, │ │ proceeds │ │ (damaged, │ │
│ │ no proceeds │ │ (gain/loss) │ │ obsolete) │ │
│ └─────────────────┘ └─────────────────┘ └─────────────────┘ │
│ │
│ GL: Cash (Dr), Accum Depr (Dr) | Fixed Asset (Cr), Gain/Loss │
└─────────────────────────────────────────────────────────────────────────────┘
Key Concepts
What is a Fixed Asset?
| Characteristic | Description |
|---|---|
| Long-term use | Used for more than one year |
| Tangible property | Physical items (buildings, equipment, vehicles) |
| Not for resale | Used in operations, not inventory |
| Above threshold | Cost exceeds capitalization threshold |
Asset vs. Expense Decision
CAPITALIZATION DECISION TREE
───────────────────────────────────────────────────────────
Is the item > capitalization threshold (e.g., $5,000)?
│
├── NO ──▶ EXPENSE IT
│ (Debit expense account immediately)
│
└── YES ──▶ Is useful life > 1 year?
│
├── NO ──▶ EXPENSE IT
│
└── YES ──▶ CAPITALIZE AS FIXED ASSET
(Debit fixed asset, depreciate over life)
Key Terminology
| Term | Definition |
|---|---|
| Acquisition Cost | Original purchase price plus installation, freight, etc. |
| In-Service Date | Date asset begins being used (depreciation starts) |
| Useful Life | Expected period asset will be productive |
| Residual Value | Expected value at end of useful life (salvage value) |
| Depreciable Base | Acquisition Cost - Residual Value |
| Net Book Value (NBV) | Acquisition Cost - Accumulated Depreciation |
| Accumulated Depreciation | Total depreciation recorded to date |
Quick Reference
Transaction Types
| Transaction | When Used | GL Impact |
|---|---|---|
| Asset Proposal | Auto-created from source transactions | None (pending) |
| Asset Creation | New asset placed in service | Fixed Asset ↑ |
| Depreciation | Monthly/periodic depreciation run | Accum Depr ↑, Expense ↑ |
| Transfer | Move asset between locations/subsidiaries | Segment changes |
| Revaluation | Fair value adjustment | Asset ↑/↓ |
| Impairment | Value decrease due to damage/obsolescence | Loss ↑, Asset ↓ |
| Disposal | Retire, sell, or write-off | Asset ↓, Gain/Loss |
Account Types Used
| Account Type | Purpose | Normal Balance |
|---|---|---|
| Fixed Asset | Asset cost | Debit |
| Accumulated Depreciation | Contra-asset | Credit |
| Depreciation Expense | Period expense | Debit |
| Gain on Disposal | Income from sale above NBV | Credit |
| Loss on Disposal | Loss from sale below NBV | Debit |
| Impairment Loss | Value decrease | Debit |
Next Steps
- Asset Types - Configure asset categories and accounts
- Asset Proposals - Understand automatic asset creation
- Asset Creation - Create and manage assets
- Depreciation - Learn depreciation methods