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Key configurations

Depreciation profile

Depreciation profile is used to configure the depreciation method(Straight line, Reducing balance etc.), frequency of depreciation to determine how the value of the fixed asset should be depreciated over time. The depreciation profile is then assigned to books

Books

Books tracks the complete financial lifecycle of an asset. Multiple books can be created separately for companies books of accounts and tax purposes. Books are setup with key attributes like service life, depreciation profile etc.  Books are then assigned to fixed asset groups.

Fixed asset groups:

Fixed asset groups are used to classify fixed assets and specify default attributes that can be defaulted to the fixed assets. Fixed group is mandatory to create a new fixed asset in D365. By default, the books that are assigned to the fixed asset group are then assigned to the fixed asset.

Derived books:

Derived books are used to automatically derive and post the transactions created for one book to another book. For example if the acquisition transaction posted in company book should also post in tax books.

Fixed asset posting profile

The posting profiles are used to setup ledger accounts to which financial transactions should be posted. The posting profile must be defined by book and each transaction type (acquisition, depreciation, disposal sales, disposal scrap etc.). The posting profile can also be configured at the more detailed level with combination of book, fixed asset group or even for the individual fixed asset. Books can be configured to post the associated transactions to general ledger. Books that don’t post to the general ledger post only to the Fixed asset subledger and are typically used for tax reporting purposes. Relationships between fixed assets components – Learn | Microsoft Docs

Key functionalities

Acquisition and depreciation

There are multiple ways in which fixed asset can be acquired in D365. Please see options below Purchase orders: Fixed assets can be acquired through purchase orders automatically. The user can select fixed asset to which acquisition should be posted or select fixed asset group to which fixed asset should be created and acquisition should be posted. Acquisition journal: This is standard and normal way to acquire fixed using acquisition journal in fixed asset module. The fixed asset acquisition proposal can also be used to create acquisition journal Invoice journal : This is from the accounts payable module for non-po based transaction from which fixed asset can be acquired. Inventory to fixed asset: Fixed asset can be acquired through companies own inventory. Usually company keeps them in inventory until it is placed in service and when it is required to place in service, companies convert fixed asset to inventory. Investment project to fixed asset: Inventory or cost projects are internal with an idea of building an asset to be used in future revenue based projects. For example building an software that helps in delivery of the project. In such the once the project is completed it can be eliminated and converted to fixed assets. 8 Different Ways to Acquire Fixed asset in Microsoft Dynamics 365 Finance and Operations – Explore Microsoft Dynamics 365 Finance and Operations Together (home.blog) Depreciations are created through depreciation proposal using fixed asset journals. The system will auto calculate the depreciation based on the depreciation method and the remaining life of the asset. Depreciation can also be posted manually Depreciation – Learn | Microsoft Docs

Reclassification and transfer

Reclassification is used to reclassify or change the fixed asset group or assign new fixed asset number in the same group. Perhaps the accounting for the fixed asset group has changed and a new group needed to be created and the assets moved from the old group to the new group. All books for the existing fixed asset are created for the new fixed asset. Reclassification posts required financial entries from reversing entries from old asset book to creating new entries in new asset book Reclassify fixed assets – Finance | Dynamics 365 | Microsoft Docs Fixed assets reclassification – Microsoft Dynamics 365 Blog Transfer of fixed asset is used to to transfer the financial information for a fixed asset book from one financial dimension set to a new financial dimension set Transfer a fixed asset – Learn | Microsoft Docs

Split a fixed asset

Splitting of fixed asset is used when portion or certain percentage of fixed asset should be split from one asset book to new asset book. Split a fixed asset – Learn | Microsoft Docs

Disposal

For the disposal of fixed asset, the different transactions types Disposal sale, Disposal scrap can be used in  fixed asset journal. Once the transaction is posted the net book value of the asset is set to zero and closed for future transactions. Sale is an external disposal whereas scrap is an internal transaction. Disposal sales can also posted using free text invoices from Accounts receivable module. Dispose and lend fixed assets – Learn | Microsoft Docs

Key Reporting

Fixed asset roll forward report:

Fixed asset roll forward report includes the valuation movements of individual by period with opening and ending balances summarised by fixed asset group and legal entities. The report is generated in excel and uses the electronic reporting framework.

Fixed asset transactions:

Use this report to print information about fixed asset transactions. This information includes the date, voucher information, transaction types, and amounts.

Fixed asset listing report