Asset Maintenance
This guide covers ongoing asset management including transfers, revaluation, impairment, and maintenance tracking.
Overview
ASSET MAINTENANCE ACTIVITIES
═══════════════════════════════════════════════════════════════════
┌─────────────────────────────────────────────────────────────────┐
│ MAINTENANCE ACTIVITIES │
├──────────────┬──────────────┬──────────────┬──────────────────┤
│ TRANSFER │ REVALUATION │ IMPAIRMENT │ MAINTENANCE │
├──────────────┼──────────────┼──────────────┼──────────────────┤
│ Move asset │ Adjust fair │ Record value │ Track service │
│ between: │ value: │ decrease: │ and repairs: │
│ • Locations │ • Upward │ • Damage │ • Schedules │
│ • Depts │ • Downward │ • Obsolete │ • Insurance │
│ • Subsidiary │ │ • Market │ • Warranty │
└──────────────┴──────────────┴──────────────┴──────────────────┘
Asset Transfers
Transfer Types
| Transfer Type | Description | GL Impact |
|---|---|---|
| Location | Move between facilities | Segment change only |
| Department | Reassign to another department | Segment change only |
| Subsidiary | Transfer between legal entities | Intercompany entries |
| Class | Reclassify asset category | Segment change only |
Location/Department Transfer
INTERNAL TRANSFER
───────────────────────────────────────────────────────────
Before:
┌────────────────────────────────────────────────────────┐
│ Asset: Forklift-001 │
│ Location: Warehouse A │
│ Department: Operations │
│ Cost: $25,000 │
│ Accum Depr: $10,000 │
│ NBV: $15,000 │
└────────────────────────────────────────────────────────┘
Transfer Action:
Move to Warehouse B, assign to Logistics
After:
┌────────────────────────────────────────────────────────┐
│ Asset: Forklift-001 │
│ Location: Warehouse B │
│ Department: Logistics │
│ Cost: $25,000 (unchanged) │
│ Accum Depr: $10,000 (unchanged) │
│ NBV: $15,000 (unchanged) │
└────────────────────────────────────────────────────────┘
GL Impact: None (only segment values change)
Subsidiary Transfer (Intercompany)
INTERCOMPANY ASSET TRANSFER
───────────────────────────────────────────────────────────
Scenario:
From: US Subsidiary
To: Canada Subsidiary
Asset NBV: $15,000
GL Entries - US Subsidiary (Source):
Intercompany Receivable $15,000 Dr
Asset - Equipment $25,000 Cr
Accumulated Depreciation $10,000 Dr
GL Entries - Canada Subsidiary (Destination):
Asset - Equipment $15,000 Dr (at transfer value)
Intercompany Payable $15,000 Cr
Notes:
- May involve foreign currency translation
- Transfer at NBV or fair market value
- Depreciation restarts with remaining life
Transfer Process
TRANSFER STEPS
───────────────────────────────────────────────────────────
1. Open asset record
2. Click "Transfer" action
3. Enter transfer details:
┌────────────────────────────────────────────────────┐
│ Transfer Date: 02/01/2026 │
│ New Subsidiary: Canada Operations │
│ New Location: Toronto Warehouse │
│ New Department: Distribution │
│ Transfer Value: $15,000 (NBV) │
└────────────────────────────────────────────────────┘
4. Review GL preview
5. Submit transfer
6. System creates:
- Transfer record
- Journal entries
- Updated asset record
Revaluation
When to Revalue
| Scenario | Direction | Example |
|---|---|---|
| Property appreciation | Upward | Real estate value increase |
| Market value increase | Upward | Equipment becomes rare |
| Market value decrease | Downward | Technology obsolescence |
| Appraisal update | Either | Required periodic revaluation |
Revaluation Process
ASSET REVALUATION
───────────────────────────────────────────────────────────
Before Revaluation:
Original Cost: $500,000
Accumulated Depr: $200,000
Current NBV: $300,000
Fair Market Value: $350,000
Revaluation Entry (Upward):
Asset - Building $50,000 Dr
Revaluation Surplus $50,000 Cr (equity)
After Revaluation:
Adjusted Cost: $550,000
Accumulated Depr: $200,000
Revised NBV: $350,000
Note: Future depreciation based on new value
Revaluation Methods
| Method | Description |
|---|---|
| Proportional | Adjust cost and accum depr proportionally |
| Eliminatory | Eliminate accum depr, restate to new value |
| Net adjustment | Adjust NBV directly |
Impairment
What is Impairment?
Impairment occurs when an asset's carrying value exceeds its recoverable amount due to:
| Cause | Example |
|---|---|
| Physical damage | Fire, flood, accident |
| Obsolescence | Technology replaced |
| Market decline | Reduced demand |
| Legal restrictions | Environmental regulations |
Impairment Process
ASSET IMPAIRMENT
───────────────────────────────────────────────────────────
Before Impairment:
Asset: Manufacturing Equipment
Cost: $100,000
Accum Depr: $40,000
NBV: $60,000
Impairment Event: Flood damage
Recoverable Amount: $35,000
Impairment Loss: $25,000 ($60,000 - $35,000)
Impairment Entry:
Impairment Loss $25,000 Dr (P&L)
Accumulated Depreciation $25,000 Cr
OR
Asset Account $25,000 Cr (direct reduction)
After Impairment:
Cost: $100,000
Accum Depr: $65,000
NBV: $35,000
Future Depreciation:
Based on $35,000 over remaining useful life
Impairment Recording
RECORD IMPAIRMENT STEPS
───────────────────────────────────────────────────────────
1. Open asset record
2. Click "Record Impairment"
3. Enter impairment details:
┌────────────────────────────────────────────────────┐
│ Impairment Date: 02/01/2026 │
│ Impairment Reason: Flood damage │
│ Impairment Amount: $25,000 │
│ New NBV: $35,000 │
│ Remaining Life: 5 years (adjust if needed) │
└────────────────────────────────────────────────────┘
4. Review journal entry
5. Save impairment
Impairment Reversal
In some cases, impairment can be reversed (per IFRS, limited under GAAP):
IMPAIRMENT REVERSAL
───────────────────────────────────────────────────────────
Conditions for Reversal:
- Change in estimates used to determine recoverable amount
- Cannot exceed original carrying amount (had no impairment)
Reversal Entry:
Accumulated Depreciation $XX,XXX Dr
OR
Asset Account $XX,XXX Dr
Impairment Reversal Gain $XX,XXX Cr (P&L)
Maintenance & Insurance Tracking
Maintenance Schedules
MAINTENANCE SCHEDULE SETUP
───────────────────────────────────────────────────────────
Asset: Heavy Equipment - Crane
Maintenance Schedule:
┌────────────────────────────────────────────────────────┐
│ Type │ Frequency │ Last Done │ Next Due │
├────────────────┼───────────────┼───────────┼──────────┤
│ Oil Change │ Monthly │ 01/15/26 │ 02/15/26 │
│ Safety Check │ Quarterly │ 01/01/26 │ 04/01/26 │
│ Full Service │ Annually │ 06/15/25 │ 06/15/26 │
│ Certification │ Every 2 years │ 01/01/25 │ 01/01/27 │
└────────────────────────────────────────────────────────┘
Notifications:
☑ Email asset manager 14 days before due
☑ Create task for maintenance team
Insurance Tracking
INSURANCE INFORMATION
───────────────────────────────────────────────────────────
Asset: Building - Main Office
Insurance Details:
┌────────────────────────────────────────────────────────┐
│ Policy Number: POL-2026-001 │
│ Insurance Co: ABC Insurance │
│ Coverage Type: Property & Casualty │
│ Coverage Amount: $2,000,000 │
│ Deductible: $10,000 │
│ Premium: $15,000/year │
│ Policy Start: 01/01/2026 │
│ Policy End: 12/31/2026 │
│ Renewal Date: 12/01/2026 │
└────────────────────────────────────────────────────────┘
Warranty Tracking
| Field | Description |
|---|---|
| Warranty Start | Date warranty begins |
| Warranty End | Date warranty expires |
| Warranty Provider | Manufacturer or third party |
| Coverage Details | What's covered |
| Claim Process | How to file claims |
Asset Status Management
Status Changes
| From Status | To Status | Use Case |
|---|---|---|
| New | Active | Place in service |
| Active | Suspended | Temporary non-use |
| Suspended | Active | Resume operations |
| Active | Disposed | Retirement/sale |
Suspending Assets
SUSPEND ASSET
───────────────────────────────────────────────────────────
Use when asset is temporarily not in use:
- Seasonal equipment
- Under repair
- Pending relocation
Process:
1. Open asset record
2. Change status to "Suspended"
3. Enter effective date
4. Add notes explaining suspension
Effects:
- Depreciation pauses
- Asset remains on books
- Can be resumed at any time
Asset History
Tracking Changes
All asset changes are recorded in the asset history:
| Event Type | Information Recorded |
|---|---|
| Creation | Original values, source |
| Depreciation | Amount, period, method |
| Transfer | From/to locations |
| Revaluation | Old/new values, reason |
| Impairment | Amount, cause |
| Maintenance | Service performed, date |
| Status Change | Old/new status, reason |
Viewing History
ASSET HISTORY VIEW
───────────────────────────────────────────────────────────
Asset: Server-001
Date Event Details
───────── ──────────────── ─────────────────────────────
01/15/26 Created From PO-12345, Cost $10,000
02/01/26 Placed in Service Status: NEW → ACTIVE
02/28/26 Depreciation $166.67 (monthly)
03/31/26 Depreciation $166.67 (monthly)
04/15/26 Transfer HQ → Branch Office
04/30/26 Depreciation $166.67 (monthly)
Best Practices
Asset Maintenance
| Practice | Recommendation |
|---|---|
| Regular reviews | Quarterly review of asset status |
| Document changes | Always add notes for changes |
| Timely transfers | Process transfers promptly |
| Impairment testing | Annual impairment assessment |
Common Issues
| Issue | Prevention |
|---|---|
| Undocumented transfers | Require notes on all transfers |
| Missed impairments | Schedule annual impairment review |
| Outdated insurance | Set renewal reminders |
| Maintenance gaps | Automate maintenance schedules |