Fixed Assets & Reversing Variable

bhalpin

Hi.

I'm looking at ways of fulfilling these user needs:

- They build their own fixed assets.

- It can take up to three years to complete an asset.

- Every month-end they make accrual entries debiting the value of the asset based on the stage of the construction.

- The entries are reversed at the beginning of the next month.

Sounds like a job for Reversing Variable journal batches.

I'm setting one up and when I run a test report I get the error:

Recurring method must not be RV Reversing Variable when Account Type = Fixed Asset.

Kinda disappointing - I was hoping to set them up with the batches they will need and make their month-ends easy.

Can anyone suggest how to do this without running into this error? (Like, do I have to post directly to the yunderlying GL account?)

Thank's in advance.

Bob

cnicola

Hi Bob,

I would think that you just do postings directly to the underlying account.
And yes you would be using reversible journals.

bhalpin

Hi.

Thank's for answering.

I'll have to experiment with this. One point I forgot to mention is that they begin depreciating assets before final costs replace the accruals. (This happens out of necessity - the asset goes into service before all of the final billings are received - sometimes over a year before.)

So, I have to see if I post accruals directly to the GL account whether depreciation is based on the GL value including the accruals (the desired value) or the asset value. (I'm pretty sure I know how this will play out ...)

Bob