Financial Setup Introduction
This section covers the financial configuration required before you can run depreciation calculations and produce period-end journals. If you are setting up Fixed Asset Management for the first time, work through these pages in order. If your system is already in production, refer to individual pages as needed when making changes.
Prerequisites
- You must be in the Fixed Asset Management profile (see Fixed Asset Management Profile).
- You should have your organisation's depreciation policies, chart of accounts (nominal codes), and accounting period structure available before you begin.
Setup Order
The recommended setup sequence is:
| Step | Page | What You Configure |
|---|---|---|
| 1 | Accounting Periods | Define your financial years and period structure |
| 2 | Books | Create the books you need (e.g. management, tax) |
| 3 | Depreciation Types | Define the depreciation formulae you will use |
| 4 | Nominal Codes | Set up the general ledger account mappings |
| 5 | Currencies and Exchange Rates | Configure currencies (even single-currency sites need a home currency) |
| 6 | Multi Company Environments | Set up companies and assign them to period sets (if applicable) |
| 7 | Assigning Depreciation Types to Categories | Set default depreciation rules for each category-book combination |
| 8 | Reviewing Depreciation Setup | Verify that all assets have correct rules before calculating |
Two Levels of Depreciation Configuration
Depreciation rules can be configured at two levels:
- Category level — Default rules are defined for each category-book combination. When a new asset is created in that category, it automatically inherits these rules. This is the most efficient approach for organisations with consistent depreciation policies per asset type.
- Individual asset level — Rules can be overridden per asset when different treatment is needed. For example, a vehicle might need a shorter recovery period than the category default because of high mileage.
In most organisations, you set up category-level defaults and only override at the asset level for exceptions.
Before vs. After Asset Import
Set up your depreciation rules, books, nominal codes, and accounting periods before importing assets into the database. This ensures that:
- New assets inherit the correct depreciation rules automatically from their category.
- Purchase transactions are created in all books.
- Depreciation can begin calculating from the correct period.
If you need to make changes after assets have been imported:
- Changing depreciation rules — You can modify category-level defaults (which affect only new assets going forward) or use the Bulk Update function to update existing assets. See Assigning Depreciation Types to Many Assets.
- Recalculating past periods — Use the Rewind function in period-end processing to reverse the current period's depreciation, make your changes, and recalculate. See The Monthly Accounting Process.
Warning: Changing depreciation rules retrospectively can cause significant journal adjustments. Always review the impact before making changes, and coordinate with your finance team if journals have already been posted to the general ledger.
Related Articles
- The Monthly Accounting Process — The recurring period-end workflow that uses this configuration
- Fixed Asset Management Profile — Navigating the Financial menu