Asset Management in OpenERP

Asset Management in OpenERP

OpenERP uses account_asset module for managing an organization's assests, it helps you to Manage the assets owned by your company and keep track of depreciation occurred on those assets. This module also create  account entries based on the depreciation lines

Asset Management module in OpenERP provide the following fuctionality:

• Provide different depreciation methods(linear, degressive),
• Compute the depreciation according to the time period and the depreciation method specified.
  create  accounting entries based on the depreciation lines.
  Have a fully integrated system with the financial and analytic accounting modules.
  Track changes on assets from any document in OpenERP.
• Compute the depreciation according to the time period and the depreciation method specified.
• Create  accounting entries based on the depreciation lines.
• Have a fully integrated system with the financial and analytic accounting modules.
• Track changes on assets from any document in OpenERP.

Depreciation Methods:

Linear Depreciation:

Linear Depreciation is the simplest and most-often-used technique, in which the company estimates the salvage value of the asset at the end of the period during which it will be used to generate revenues and will expense a portion of original cost in equal increments over that period.

Degressive  Depreciation:

Degressive  Depreciation that provide for a higher depreciation charge in the first year of an asset’s life and gradually decreasing charges in subsequent years.

Asset Categories:

Asset Categories  give  an  idea about the general accounting information and  depreciation date related to the asset.

You can create/find your asset category in "Invoicing >Configuration >Assets >Asset Categories".

From the asset category you can configure the following items:-

Name: A name for the asset category, e.g. machinery, office equipment, vehicles.

Journal: A journal to store the accounting entries.

Asset Account: This account holds the purchase value and will be credited when depreciation line is posted.

Depreciation Account: Account, can be the same as the Asset Account or it can be different for storing depreciation separately.

Depr. Expense Account: Expense account which will be debited when the depreciation line is posted.

Time Method: This method determines how the dates and the number of depreciations will be computed. There are two options: Number of Depreciations or Ending Date.

Number of Depreciations: If time method is Number of Depreciations you must specify a number of depreciation lines.

Ending Date: If time method is Ending Date then you must specify the ending date and the depreciation date won't go beyond this date.

Period Length : Time duration between two depreciations, in months.

Computation Method: Linear (Straight-line method of depreciation) or Degressive (declining-balance). When you select Degressive, the following field will be added.

Degressive Factor: If computation method is Degressive, you have to specify the degressive factor,This is used to calculate depreciation lines by multiplying it with remaining depreciation value.

Prorata Temporis: If True, first depreciation entry will be calculated from purchase date.

Skip Draft State: If True, assets of this category will be automatically confirmed when created from invoice.

Creating Assets:

We can create assest  directly from the menu  "Invoicing > Assets >Assets" and click Create.

Asset: A name for the asset.

Asset Category: Select a category for the asset to determine the depreciation method.

Reference: Optional field to specify an extra reference for the asset, e.g. the licence plate of a car. When the asset is created from a purchase invoice, by default this field will contain the invoice number.

Gross Value: Gross purchase amount of the asset (including any non-reclaimable VAT).

Salvage Value: The remaining value of an asset after it has been fully depreciated (also called remaining value).

Residual Value: The actual amount left to be depreciated (by default the gross value - the salvage value, but updated according to depreciations posted).

Parent Asset: This box allows you to relate one asset to another one, e.g. if you buy a car kit for a car that is already an asset in your company.

Purchase Date: Date on which the asset has been purchased.

Partner: Supplier of the asset.

          For confirmed assets, you can post the depreciation lines by clicking the Create Move button in a depreciation line. You can also see that the Depreciation Amount  deducted from the Residual Value. From the menu "Invoicing > Periodical Processing > Recurring Entries > Compute Assets" you can post all assets for a specific period.

Analysis of Assets:

          "Reporting >Accounting >Assets Analysis" will give you the statistical report of assets.