About fixed asset splits

Splitting is used to divide a fixed asset consisting of a group of items into two or more separate assets, or to divide an asset by only cost and depreciation.

It is also used for partial asset disposals and transfers, because you might need to get rid of a portion of an asset, perhaps because you determine that a portion of the asset has become useless or you simply decide that selling part of the asset would be profitable.

• When splitting assets, define the cost and the quantity of units for the asset components being removed from the fixed asset.
  The new asset record is created, containing the appropriate percentage of the original asset cost, the specified quantity, and the depreciation adjustments.

• An asset can contain one unit or multiple units.
  You can split an asset regardless of the quantity of units, even if the original quantity was 1.

• Due to the split, the original asset that you divide by cost remains with the original asset ID, but its cost, depreciation, and salvage amount are reduced by the amount of the new asset, which you created by splitting the original one.
  The new asset is a separate asset with a new unique identifier.
  As the asset's description, the system automatically adds Split from and the number of the original asset.

• After you split an asset, you must release the associated transactions that signify the asset and asset depreciation split according to your company's workflow. You cannot reverse the corresponding split.

• You can split an asset only before its disposal date.

You can view the history of the splits of an asset in the Asset splits (FA405000) window.

Release of transactions

When you split an asset, the system generates the following transactions:

• For the original asset:
  • Purchasing – with the total removed cost
  • Depreciation adjusting – with the total removed amount of the accumulated depreciation
• For each new asset:
  • Purchasing + with the cost of the new asset
  • Depreciation adjusting + with the appropriate percentage of the accumulated depreciation

The transactions are nominal transactions signifying the split; they are not posted to the general ledger.

Example

Suppose that you purchase 100 units of office chairs for €1000 total, and that you can set up one fixed asset with an original quantity of 100 units and a useful life of one year, by using the straight line method, with a depreciation cost of €83,30 monthly as a whole.
Then, on the third month after its purchase, you want to sell part of the asset: 20 of the 100 chairs.
The already depreciated cost of the original asset is €250 and the cost to be depreciated is €750.

For this operation, you split the asset into two:

• The original asset, the quantity of which is reduced from 100 units to 80, with the ratio equal to 80%.
  The asset ID is not changed. The depreciated cost is reduced to €200 and the residual value to be depreciated is reduced to €600.
• The new asset, with a quantity of 20 items and a ratio of 20%.
  This asset has a unique asset ID generated by the system.
  The asset gains the depreciated cost of €50 and the residual value to be depreciated is €150. This is the asset that you sell.