Recalculate replacement costs and insured values for fixed asset groups
Periodically, you might be notified that the cost to replace or insure specific fixed assets has changed.
For example, your manager might inform you that inflation was 3% last year, so you need to increase the replacement cost of all fixed assets by 3%.
Though you can edit the replacement cost and insured value for individual fixed assets on the Fixed assets page, you can use the Update replacement costs and insured values page to update these values for a group of assets at once.
The following information describes how to update values for fixed asset groups or for specific assets in the groups.
To recalculate replacement costs and insured values for fixed asset groups, you first need to specify the percentage by which to change the existing replacement costs and insured values. Then, you can perform the periodic update to recalculate the values.
You can specify the percentage in the Replacement cost factor and Insured value factor fields on the Fixed asset groups page. Though you specify these factors for the fixed asset group, when you use the Update replacement costs and insured values page, you can select to recalculate the replacement cost and insured value for only specific fixed assets in a group.
When you use the Update replacement costs and insured values page to recalculate the replacement cost and insured value for the assets, the system uses the following formulas:
[(Asset group's replacement cost factor / 100) + 1] * Asset's existing replacement cost[(Asset group's insured value factor / 100) + 1] * Asset's existing insured value
When you use the Update replacement costs and insured values page, the system updates the replacement cost and insured value for the selected assets; you can't specify only one value to be updated. To leave one value the same and update the other value, enter 0 (zero) as the factor on the Fixed asset groups page. A zero or blank factor causes the system to skip the calculation in the update. The book value and net book value of fixed assets aren't affected by the periodic update.
Use a date to select which items to update
By default, the update process updates the selected assets that aren't updated on the current day but that might have been updated on previous days.
For example, the < current date value means "before today." You can change the date on the Update replacement costs and insured values page by selecting the Select button.
The system compares the date criteria that you specify to the date of the last periodic update for the asset (the Last periodic value/cost update field on the Fixed assets page). Whenever you successfully update the replacement cost or insured value for a fixed asset, the system automatically updates the Last periodic value/cost update field with the current date.
To understand this process better, consider the following example.
Yesterday, you updated the replacement cost of the Vehicles, Office Furniture, and Buildings groups by 5%. Now, you consider these assets accurately updated.
Today, if you want to exclude these assets when you update all other fixed assets, you need to enter a date that's before yesterday (< yesterday's date) in the Last periodic value/cost update field. The reason is because the last update for the Vehicles, Office Furniture, and Buildings groups occurred outside the date criteria that you entered.
Then, you can make the following changes:
On the Fixed asset groups page, for all fixed asset groups except the Office Furniture group and Computers group, enter 3.25 in the Replacement cost factor field and 0 in the Insured value factor field.
For the Office Furniture group, enter 4.25 in the Replacement cost factor field and 0 in the Insured value factor field.
For the Computers group, enter -10 in the Replacement cost factor field and -10 in the Insured value factor field.
On the Update replacement costs and insured values page, select OK to perform the recalculation for all fixed assets.
The next day, your manager informs you that computers decreased 8% instead of 10%, so now you need to correct the replacement costs and insured values. To fix the error, you can use one of two methods:
Change the Insured value and Replacement cost fields manually on the Fixed assets page for each fixed asset in the Computers fixed asset group. Calculate and manually enter the values as if you decreased the original amount by 8%. By using this method, you don't use the Update replacement costs and insured values page.
Enter replacement cost and insured value factors for the Computers group in the Replacement cost factor and Insured value factor fields on the Fixed asset groups page. This action resets the assets to their original value (before the 10% decrease) and applies the 8% decrease to the original value. Then, use the Update replacement costs and insured values page to recalculate the values, depending on the factors that you entered.
You can't reverse the -10 factor by entering a factor of positive 10 (or a factor of 2, the difference between -10 and -8) because the amounts aren't calculated as you intended.