[ADVANCED FEATURES] Asset management
Summary
TLDRThis video explores asset management, a key aspect of accounting crucial for businesses. It explains the depreciation process, which spreads the cost of assets like cars and laptops over their useful life, offering fiscal benefits. The video demonstrates how to set up and automate asset management using Odoo software, covering linear and aggressive depreciation methods, asset models, and vendor bill configurations. It also addresses frequently asked questions about handling existing assets, depreciation reports, and automation, providing a step-by-step guide for efficient asset tracking and accounting.
Takeaways
- 📊 Asset management is crucial for accounting and helps manage business resources efficiently.
- 🚗 Businesses purchase tools like cars, laptops, and software, which are considered depreciable assets.
- 📉 Depreciation allows companies to allocate the cost of an asset over its useful life, offering fiscal benefits.
- 🔄 Depreciation reduces the annual taxable income by spreading the cost of assets over time.
- 📅 Different depreciation methods exist, such as linear (equal amounts each year) and aggressive, which accelerates the expense early on.
- 🇧🇪 Belgium uses a specific aggressive linear depreciation method unique to its accounting practices.
- 🛠️ Asset models in systems like Odoo help automate asset management and depreciation processes.
- 💻 A use case in Odoo shows how a MacBook Pro purchase is depreciated monthly over three years using a linear method.
- ⚙️ In Odoo, fixed assets are tied to specific accounts, and automated depreciation schedules can be set up based on the asset model.
- 📋 Depreciation schedules and reports in Odoo allow for easy tracking of assets and their decreasing values over time.
Q & A
What is the purpose of asset management in accounting?
-Asset management is key to accounting as it helps businesses manage their assets like tools, materials, and equipment. It ensures that the costs of physical assets are allocated over their useful life, optimizing tax benefits and business operations.
What is depreciation and why is it important?
-Depreciation is an accounting method of allocating the cost of a physical asset over its useful life. It is important because it allows businesses to spread the cost of an asset over time, providing a fiscal advantage by reducing taxable income through increased expenses.
How does linear depreciation work?
-Linear depreciation divides the cost of an asset evenly over its useful life. For example, if a car costs €12,000 and has a useful life of 3 years, the company would depreciate €4,000 each year.
What is the aggressive linear depreciation method?
-Aggressive linear depreciation allows a company to depreciate more of the asset’s cost at the beginning of its life and less as time progresses. It is specific to certain countries like Belgium.
How does Odoo automate asset management and depreciation?
-Odoo uses asset models and configurations to automate asset creation and depreciation. When a vendor bill is posted with a fixed asset account, Odoo creates an asset record and automatically generates future depreciation entries based on predefined rules.
What steps are required to configure an asset in Odoo?
-First, an asset model must be created with details like the depreciation method and duration. Then, the asset is linked to a fixed asset account. When a vendor bill is posted, an asset is created in draft mode, which can later be confirmed and managed.
How can users manually create assets already in the depreciation process?
-Users can manually input the original value, acquisition date, and depreciation method for assets already being depreciated. Odoo allows users to specify the existing depreciated amount and number of past depreciations to continue from the current period.
Can you automate asset creation from miscellaneous operations instead of vendor bills in Odoo?
-No, Odoo does not support automatic asset creation from miscellaneous operations. Assets can only be created automatically through vendor bills.
How does Odoo handle the posting of depreciation entries?
-Odoo can automatically post depreciation entries at the accounting date without requiring manual intervention. Once the asset is confirmed, future depreciation entries are created and scheduled to be posted automatically.
What reporting options does Odoo offer for asset management?
-Odoo provides a depreciation schedule report that shows detailed information about all assets, including acquisition dates, depreciation methods, asset values, and book values. Users can filter the report by periods and include forecasts of future depreciation.
Outlines
💼 Introduction to Asset Management and Depreciation
The speaker introduces the concept of asset management as a key aspect of accounting and business operations. Businesses need to purchase various tools and materials, such as cars, laptops, and software, which are considered depreciable assets. Depreciation allows businesses to allocate the cost of these assets over their useful life, providing a fiscal advantage by reducing taxable income. Different methods of calculating depreciation, like linear and aggressive depreciation, are briefly mentioned, with the linear method being explained in more detail.
📊 Setting Up Asset Models and Depreciation in Odoo
The process of automating asset management in Odoo through asset models is described. These models allow businesses to preset configurations such as depreciation methods, periods, and accounts. The speaker walks through the steps of creating an asset model for a MacBook Pro with a linear depreciation method over 36 months. The importance of linking the model to the correct fixed asset account and configuring it for automatic asset creation when posting vendor bills is emphasized.
🖥️ Configuring and Managing Fixed Assets in Odoo
This section covers the detailed process of configuring and managing fixed assets in Odoo. The speaker explains how to assign a fixed asset account when creating a vendor bill and how Odoo automatically generates an asset form based on the chosen asset model. The speaker demonstrates the process with a MacBook Pro purchase, showing how to input the correct account, confirm the bill, and review the asset form with all relevant depreciation information. Additional features like managing multiple assets in one bill and automating depreciation entries are also highlighted.
✅ Confirming and Automating Depreciation Entries
The speaker explains the next steps after confirming an asset in Odoo. Once confirmed, the asset enters a 'running' state, and the depreciation entries are generated automatically for the entire period. The speaker highlights that users don't need to manually post these entries, as Odoo will automatically post them on the correct accounting date. The convenience of this feature is emphasized, along with how users can generate reports to track the depreciation schedule and forecast future depreciation movements.
Mindmap
Keywords
💡Asset Management
💡Depreciation
💡Linear Depreciation
💡Aggressive Depreciation
💡Asset Models
💡Fixed Asset Account
💡Vendor Bill
💡Odoo
💡Depreciation Board
💡Book Value
Highlights
Asset management is a key part of accounting for businesses, covering tools and materials used over a long period.
Depreciation allows businesses to allocate the cost of assets over their useful life for fiscal advantages.
The goal of depreciation is to reduce tax liability by spreading out asset costs over multiple years.
The linear method of depreciation divides the total cost evenly over the asset's useful life.
Aggressive depreciation involves a higher initial expense, which gradually decreases over time.
Asset models in accounting systems allow preset configurations for managing depreciation automatically.
An asset model needs to be linked to a fixed asset account in the chart of accounts for automated asset creation.
In Odoo, assigning a fixed asset account during vendor billing will trigger automatic asset creation.
Using the linear method, a MacBook Pro was depreciated monthly over three years, showing how asset models are set up in Odoo.
Automated asset management in Odoo includes creating draft depreciation entries for user validation before posting.
Depreciation entries can be posted automatically at the end of each accounting period without manual intervention.
Assets that are already in depreciation can be added manually, including specifying existing depreciation amounts and schedules.
The depreciation schedule report provides an overview of all existing assets, including acquisition dates and depreciation status.
For assets already in the depreciation process, Odoo allows continuation of the depreciation schedule without creating past entries.
Automated features in Odoo can simplify asset management, such as the OCR feature for consistent expense account allocation in vendor bills.
Transcripts
hello dear doers and welcome to this new
video about
asset management asset management is
really one of the keys of
accounting and how a business needs to
be conducted
so at some point in the business life
people need to buy tools and material
in order to conduct the business
properly for example they need to buy a
car they need to buy a laptop they need
to buy
licenses software and so on all these
can be what we call depreciated in order
to reflect their cost
throughout a long period of life and
we're going to see together what this
depreciation concept means and how we
can
manage that in a two so depreciation
is an accounting method of the
accounting method of allocating the cost
of a physical asset
over its useful life or life expectancy
so the goal here is a fiscal advantage
because
we are going to divide the cost of the
assets throughout the asset life so when
you buy
a car for example so it costs you you
know dozens of thousands of euros so
it's
quite costly and is going to be
represented
on one period of your uh the purchase is
going to be represented on one period of
the year
uh the year you bought it but you know
the cost is going
needs to be split throughout the uh the
life expectancy of the car
because you use it for more than one
year more than one
one uh period and the physical advantage
of
splitting the expense throughout
the um the the life expectancy is that
then you're going to get more expenses
in your p l and then so your uh
total benefit of the year is going to be
little decrease and then you can
pay then less taxes at the end of the
year of course
you have different methods for
calculating depreciations
the first one is linear so basically
you're going to take the whole amount
and you're going to divide it by the
amount of
the number of depreciations the
aggressive
so here you're going to you're going to
depreciate a little bit more at the
beginning and then less less less
a bit less every time for each
depreciation
and aggressive linear is something that
is belgium specific so it's
only a method that needs to be used for
this country
only in order to make that work you know
do and automate the asset management
process we have what we call
asset models so these models allow you
preset configurations to complete the
asset mandatory information
which are the method the period the
accounts the analytics
analytics are facultative but you can
also include them in the asset model
it will allow you the automated creation
of an asset when posting a related
vendor bill
what happens basically in ado when you
create an asset
well first you have to design the asset
model so you have to create it
and this asset model needs to be linked
to
a fixed asset account in your chart of
accounts and all there are also some
necessary configurations
on the account itself afterwards when
you create the vendor bill you're going
to assign this fixed asset account
instead of an expense account
and when you post this bill an asset is
going to be created
so let's test that out in a use case
for fping cars that would like to manage
their assets depreciations in udu
this year they bought the following
fixed asset which is a macbook pro
for uh 2500 euros with uh
so the depreciation is going to follow a
linear method with
monthly depreciation for three years
so let's go in or do just to check that
out how are we going to do that so first
let's do the uh configurations so i'm
going to go
in the configuration menu and check for
the asset models
so i'm going to create a new one uh
here so i'm going to say for all my
laptops i
always want to have a straight line so
linear method
and i'm going to say uh so it was linear
for three years
but it's a monthly depreciation so here
i just have to put
36 months and i'm going to say i'm going
to choose my ass
fixed assets so it needs to be a type
fixed asset of course or immobilization
so here i have non-current assets or
fixed assets that will be
both of them and um not this one
this one and i'm going to choose uh
the one for furniture and vehicles
so this is the fixed asset account that
i'm going to choose in belgium we use a
different one for depreciation
but in other countries it can be the
same account as well i'm just going to
create a new one
because for um
friends and belgium mainly continental
accounting you would use a different
account for your depreciations
and that's easy for example that way we
can see the difference i'm just going to
choose a non-current assets
and keep it that way
with the code and save and my expense
accounts
for my depreciations and the journal you
want to go to have the depreciation
entries to go in
so i'm going to put my miscellaneous
account and that's it for the asset
model
once this is done i need to
fill in the information on the fixed
asset account so i'm going to click on
the fixed asset
and as you can see when i choose a
non-current asset type
or a fixed asset i have
it's actually the same thing in here you
have the automate asset
option that is available and here i want
to automate it and my best practice
would be always creating draft because
you want the user to validate the asset
before we confirm it
and you can choose an asset model that
you have created so here
every time that we're going to use this
uh this account in a vendor bill
once we confirm the bill then we're
going to create a new
asset form that will follow its
own depreciation schedule
it can happen that you have you may
purchase you know multiple laptops in
one bill
but you still want to have different
asset forms for each of the laptops
in that case you can select the manage
items
option which means that it will make
as many asset records as there are
quantities in the vendor bill here i'm
not going to put it because i'm not
interested in it right now
i have done my uh configurations what
i'm going to do is
take a vendor bill here and i'm going to
upload my
uh my um
my bill here so i have a bit
i have my draft bill with my
preview with my pdf here and this is my
invoice for my bill for my apple my
macbook pro
and i'm going to refresh the ocr if it's
willing to do it
it's not finished yet hey okay perfect
so they have uh
created the i have a vendor here with my
information
in here as well i just need to change
the text because it was not
non-eu but belgian tax
in here so i have the only thing i have
to change
is my account which is going to be my
fixed asset account
instead of a classic expense account
when you use the ocr
if you have multiple bills like this um
since you will confirm the first
vanderbilt afterwards it will be able to
detect also the proper
account thanks to the algorithm so
remember we talked about this
for the documents management so the
algorithm will give you the
the mostly used combination between the
vendor
and the label so if it detects the same
label
with this vendor it will give you a
every time the right account so here
it's my fixed asset account but
here's it's the first time i have to
change it manually of course
i'm going to confirm and you see that
once i confirm i have a new spot button
created with
an asset here it's in red because it's
in draft and
it hasn't been created it hasn't been
confirmed yet
so i'm going to click on it
and i reach the proper uh
asset form with the information related
to
this this
to this uh purchase i'm sorry so in the
original value it takes the
vat excluded amount of course uh because
we don't
depreciate vt taxes um i have the
related purchase related to it so i i
can always get back
to the related bill i here on the
journal entry so there's no issue
and you see that the asset model that
i've selected for that fixed asset
account has filled in for me all the
information that i needed so the method
the duration um the um
the accounting information for the
accounts
and if i haven't activated the analytics
yet so we don't see it but
you could also mention some analytic
dimensions in here
if you want to see how it will be
depreciated before confirming it you can
click on compute depreciation and what's
going to happen is that you're going to
have the depreciation board created
and you're going to have a preview of
all the future entries
for all the um the depreciations
so here since i'm in linear in straight
line
all the depreciations are equal uh in
amount
and you can see when they are going to
be depreciation depreciated so every
every last day of the month because it's
a monthly appreciation
so here i'm good to go and what's going
to happen is that i'm going to
confirm the
assets so here it goes in running state
and you have
the depreciation board everything here
corresponds to
a journal entry so every blue line here
is a journal entry
in draft so all these exist and you can
see this here through
the smart button you have all the
existing entries
at that point you don't have to do
anything else you don't have to
post them on a monthly basis
because when you click on it you see
that i have a message saying
this move is configured to be posted
automatically at the accounting date
so the accounting date here is the end
of this month
and uh the option related to that is the
in is in the other info tab with the
post automatically
so it's just here so that when the
accounting date comes up
it will post automatically the entry so
that's actually super convenient because
in that case
once you've validated the asset you
don't have anything else to do
if you want to check what has been
happening with your assets on an
aggregated basis you can
go in the reporting section and you're
going to have
the depreciation schedule report
where you'll be able to see all the
assets existing in your system
the confirmed assets and you're going to
be able to see the information related
to it so
the acquisition date the first
depreciation the method
the rates the asset value
so here the depreciation schedule needs
to show
the movements throughout the period
you've selected so here don't forget you
have date filters again so you could
choose also
shorter periods if you want to so here
for example
i have purchased this new asset
throughout the year so it
is in the plus section and the total of
it at the end of the year
should be well the same amount of course
and the deepest in the depreciations i
don't have
anything yet because no entry has been
posted
but you can do some forecasts anyway
because you could decide to
include unposted entries and in that
case you see
the whole amount that is going to be
posted
throughout the year so from january 1st
to 31st of december
um and see that here we have multiple uh
we have like six different uh
depreciations to go
until the end of the year and the book
value
is basically the uh value of the assets
minus the depreciations the percent
depreciations
if i decide to go a year further
here you see that the forecast is going
to change
so i have in at the beginning of january
20
2022 i'm gonna have the existing
depreciations from 2021
and i'm gonna have the movements from
the year 2022
and the value is going to decrease so
every time that
um every time that throughout the
the life expectancy of the asset the
book value is going to decrease
and it will go down up to uh down to
zero
so that's the goal is that the book
value is down to zero at the end of the
depreciation
schedule
let's talk about the frequently asked
question about asset management
so first uh how do i create assets that
are already
in the depreciation process in my
accounting that's actually
a question that comes that comes up a
lot because
when you implement a client's accounting
they always have some assets in the
system
and in v14 we have new uh
field that enables you to do that
without creating the past entries
so in the assets you're going to create
them manually so they are not going to
depend on
existing bills and let's say we have uh
you know opening assets
you're going to put the original value
the proper the the proper acquisition
date
um the information here the depreciation
method is going to remain the same
the fixed uh the accounts are going to
be the same
but you see here you have three new
fields that are only visible if you're
in developer mode so you need to
activate the debug mode
and you can decide to assign the
existing
depreciated amount so what has already
been depreciated depreciated in the past
sorry
so here if we um depreciate on a 10-year
scale
and it's already been three years i'm
going to put
the depreciation depreciated amount to
300
with three existing depreciations and
the first
depreciation date was uh the 31st of
december
uh three years ago 2008 2017.
and here the only important thing that
you need to remember when you do this is
that the duration
needs to reflect only the future
depreciation so here we're going to put
seven um start depreciating
at the end of this year so that's fine
and we bought this
uh in may 2017
just to make it a bit consistent i'm
gonna put my account
here and my expense account so the
accounts don't change at all
it's just the way we deal with the
existing depreciation schedule
and how we adapt the depreciation method
in order to make that work we're going
to compute and you see that in the
compute the depreciation board i don't
have
10 years as it it is
initially planned for this asset but i
have
the remaining seven depreciations for
100 each so we
resume the depreciation board thanks to
these depreciation schedule
items and we don't have to create past
entries for that
work and once we confirm this um
yeah no i made a mistake sorry because i
have to put the proper depreciation date
so i put 17th but it's what's supposed
to be this year of course because we
resume
the um the appreciation so let's start
over
and put 2021 instead
um yeah seven years nothing has changed
on that case
depreciation
[Music]
no my bad again
this one is correct and this is the one
that is not correct
here start depreciating compute
and you see here that we start indeed on
2021.
i'm gonna put just yellow that way we
can identify it in the report
and we're going to confirm and now we
are back on track with the proper
depreciations and if i check the
depreciation schedule
here you see that my testilo here has
the proper acquisition dates
uh with the first depreciations get
representing
indeed the uh the first on the 2017 and
in 2017 sorry the asset amount is
correct the depreciation from the past
are also represented
and uh you're going to have the future
depreciations taken into account with
the proper book value
so this is only something that is
available in v14 unfortunately
when you're in v13 and previous versions
you need to
import the assets as they should be with
the whole depreciations
trigger the creation of uh past entries
making a reverse and then afterwards
you'll be able to have your assets
going on in the system next
is it possible to have a hierarchy in my
depreciation reports
it is and you've probably already seen
it you see i have the hierarchy for my
account my fixed asset account and it is
due to the filter hurricane subtotal if
i take it out i would just have
the list of assets in it
next question i don't like having the
entries already in draft in my
accounting can i remove them
no you can't that's something that can't
be that can't be done and
it will just bring problems so don't do
it and challenge this requirement
i know it's a bit uh frustrating to see
all this and confusing more uh
more or less but here the what you see
here are journal entries so if you
decide to delete those
then your depreciation board is going to
be empty so i don't advise i don't
recommend
deleting the removing them that's not
that's not a possibility
do i have to filter every month the
depreciation entry
to uh and post them manually no uh
as i said there is this post
automatically feature
that will enable you to to fill in the
information
to post automatically the the entries so
you don't have to do anything one
once the asset is confirmed and last
question can i automate the creation of
an asset
through a miscellaneous operation
instead of a vanderbilt no you can't
that's not possible
in the system you can you can only go
through the
vendor bills that's it for me in this
video thank you for watching and see you
in the next topic
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