Transfer of a Depreciable Asset

Many fixed assets will reside in the same location for their entire useful life while others may be transferred one or more times. When an asset is transferred, it can be tricky to properly account for the correct amount of depreciation taken before and after the transfer date. Bassets eDepreciation simplifies this process and takes the guess work out for you.

An asset can be transferred from one business unit (location, division, department, etc.) to another when it is either actively depreciating or even after it is fully depreciated. Moving the asset to a new business unit means also moving the assets’ monthly depreciation amount. The confusion sometimes comes from then applying any prior accumulated depreciation to the original asset. Let’s look at the processing involved and examine the financial impact of a transfer.

Bassets eDepreciation will process both complete and partial transfers with the transfer form shown here:

For a complete transfer you only need to enter a transfer date and 100% of the asset will be allocated to the new business unit. Bassets eDepreciation will create a second asset that can then be edited to reflect the values of the new location.

For a partial transfer you need to enter a transfer date along with either a percentage or dollar amount to represent the portion of the asset that is being transferred. In this scenario, the original asset will continue depreciating at a reduced amount while a new asset is created for the transferred portion.

In both a complete and partial transfer it is critically important to be able to run a report for a current period before the transfer date and still see the correct depreciation amounts. Some systems simply move the asset to a new location and then lose any history of the original values.

For more detail on understanding the transfer report, please refer to our earlier post:

Understanding Depreciation Transfer Reports

 

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More information about Bassets eDepreciation software can be found at Bassets.net. While there you can set up a demonstration, download a free evaluation copy and get a personalized pricing estimate.