AssetAccountant runs a responsive journaling system that is sensitive to changes in your data.
Some journals can become confusing, particularly when there have been changes to your data with an effective date prior to your last journal or where there have been transfers between Asset Groups or Classifications.
AssetAccountant can provide assistance in determining the source of any confusion at our standard hourly rates, however we suggest you follow the steps below first, in order to determine the source of any unexpected journal lines.
Here are some typical scenarios that may cause confusion:
1. A new transaction with an effective date prior to the date of your last journal
For example, if you create a 31 March journal, then add an asset with a purchase date of 16 March, this transaction will not have been included in the 31 March journal.
If you then create a 30 April journal, both the 16 March purchase and any depreciation for both March and April will be included in the April journal. This is correct treatment, but it can be confusing.
If you encounter this situation, the best approach is to run a second 31 March journal - this will include any differences between the initial 31 March journal and the second, adjusting journal.
If you had already created a 30 April journal, you would need to delete this journal first in order to rerun the 31 March journal.
Following this procedure should reveal adjustments made to assets prior to the last journal date and explain the difference up to the current point in time.
It is also possible to click on the 'Show Details' links under any journal line to identify which specific assets are included in any journal line item. You can then open up any of the assets in question and review their transaction history.
2. Other Users may have changed your data
If you have multiple Users in your register, they may have made fundamental changes to assets that you may not have been aware of. AssetAccountant keeps a comprehensive audit trail of all calculation-impacting changes to your data and attributes these changes to the User(s) making the changes.
We suggest reviewing the Description column of your assets for transactions that may have affected your journals.
HELPFUL HINT: Show Reversals
Reversals of transactions may cause changes to your journals, depending on when your journals were created and when the Reversal was made.
For example - if you were to:
- Purchase an asset with a purchase date of 15 March on the 6th of April
- Create a 31 March journal on the 7th of April
- Reverse the purchase the 8th of April
The reversal will show up in your next journal as the purchase was accounted for in the 31 March journal (and may have been posted to your general ledger). This purchase needs to be unwound in order to reflect the new state of your asset register.
3. Asset Group Transfers and Classification Transfers
AssetAccountant breaks down journals by Asset Group and by Classification. When Group Transfers or Classification Transfers occur, AssetAccountant will move Balance Sheet items from the original Group or Classification to the new Group or Classification from the date of acquisition and all Profit and Loss items from the date of transfer.
- Purchase an Asset on 1 January and assign it to the Classification: Location -> New York
- Run a 31 March journal
- Transfer the Asset from Location -> New York to Location -> Dallas with an effective date of 15 March
- Run a second 31 March journal
The Balance Sheet items will be transferred from New York to Dallas from 1 January and the Profit and Loss items will be transferred from 15 March.
This can be confusing, but is correct treatment. The key to analysing these situations is to look carefully at the Debits and Credits columns of your journals. If you see some line items where a transaction that is normally a Debit is showing as a Credit, this is usually an indication of a Group Transfer or a Classification Transfer.
In other words, when an asset is moved from one group to another or one classification to another, AssetAccountant needs to take account of what has already been posted in your previous journals and unwind previous postings and allocate them to the new group or classification.
Again, we recommend clicking on 'Show Details' next to any journal line items you don't understand in order to investigate further.
With asset registers that have multiple classifications (e.g. locations, profit centers, etc.) you may need to interrogate multiple journals and multiple affected assets to understand why the numbers are presenting as they are.
You may need to carefully review changes in assets you have previously made, and when those changes took effect.
In addition fo Classification and Group transfers, changes to keep an eye out for include:
* Lease Refinancing
Remember that the timing of changes to your assets and their effective dates interact with the timing of creation of journals and their effective dates.
4. Opening Balances and Journal Start Dates
Opening Balances are used to establish the date when AssetAccountant becomes the 'source of truth' for your assets and leases.
AssetAccountant will ignore transactions prior to Opening Balance when creating journals and you can reinforce this by choosing a Journal Start Date for your first journal that aligns with the Opening Balance date for your assets and leases.
The exception to this rule is, when making changes to assets that have transactions such as Revaluations, Classification assignments or Group Assignments prior to Opening Balance, AssetAccountant may need to move some amounts from these prior transactions / assignments to their new assignments.
When investigating these sorts of movements, it's important to expand the 'Estimated' transaction list in your View Asset screen. This list contains any transactions or assignments that were made prior to an Opening Balance being taken up and can help explain why later journal movements appear.
5. Synchronising Classifications
If AssetAccountant is linked to an integration partner such as QuickBooks Online, Xero, Sage or Microsoft Dynamics, it's important to keep AssetAccountant Classifications synchronised with 'classes', 'tracking categories' and 'dimensions'.
If a class, tracking category or dimension is no longer being used and Classification Transfers are made in AssetAccountant to reflect this change, AssetAccountant will need to post a reconciling journal in order to reflect this change.
If these classes / tracking categories / dimensions are disabled in the integration partner prior to posting this reconciling journal, it's possible that the integration partner will reject the journal due to this disablement. It's important to keep deactivated classes / tracking categories / dimensions active until you've posted a reconciling journal from AssetAccountant so that any movements related to these Classification Transfers can be posted.