| Fixed Assets - Repent! The End is Near by Tom C. Davis, CPA |
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Over
the last few years many firms have been steadily upgrading hardware,
operating systems, office applications and other types of software.
However, in almost every firm, there are many applications that have not
been upgraded. Fixed asset software is an excellent example of a
critical application that many accountants have been slow to change. Well, the Year 2000 changed all
that. If you are sitting on a DOS fixed asset system, there is an
excellent chance you will be making a change in a hurry. When you are in “fix-it” mode, there is a
tendency to strive to simply duplicate the capabilities you had with the
old system when implementing a new application. This approach will
solve the problem, but it misses the opportunity to change processes or
to develop new capabilities, or products that can generate new fees. When selecting a new fixed asset
system consider several things: Don’t spend much time
accessing the ability of the available packages to calculate
depreciation using various methods, lives, etc. This is a
“mature” category of software and there have not been any
significant changes in tax or financial presentation requirements in
years. The major “technical’ difference” between
applications will be the number of depreciation “books” you will
need to accumulate depreciation for Federal, state, local, book, and
other basis’s of accounting. The ability to convert your
existing information is going to be very important. Almost all the
applications have good text file importing features. It is
critical that firms plan how to convert their information. If
you are upgrading from your current vendor’s DOS version to their
Windows model, your information will probably convert automatically.
However, if you change vendors, you will not find much “automatic”
conversion of information and will have to convert using a “text
file” approach. Lets talk a little about importing information
using text files. This method of converting information has become
the norm and is used to convert fixed asset, writeup, trial balance,
transaction, and other information. Text file importing is very easy to do. The first step is to print a report from the old system that contains the information you want to import. Many applications have the built-in capability to print to a file. Otherwise, you may have to setup a Windows “file printer”. Next, you use the new application’s text file import features. They identify the file, its text type, and the fields of data that will be converted. Many systems allow you to build an import profile that can be used over and over to speed up the conversion process. This feature is very important in a fixed asset application, since you will be converting data for many clients and this process must be repeated client-by-client.
Don’t get tunnel vision and focus
only on the fix-it aspects of selecting a new depreciation package.
Look for opportunities to provide additional services to your clients. You may find opportunities to
implement fixed asset software in your client’s offices. Many
clients need fixed asset information not used by accountants for tax
returns and financial statements. A client’s focus may include
operations information by department, location, asset type, or specific
asset. A multi-location client may need fixed asset information by
location to provide information to many different taxing authorities. One thing that I have never
understood is why tax vendors do not provide features that would make it
possible to use the “depreciation engine” in the tax package for
preparing “book” depreciation. In many instances, firms are
using the tax system depreciation system for non-financial statement
engagements and for engagements that have a small number of assets.
For larger engagements and for those that have separate book and tax
depreciation, a “dedicated” fixed asset package is used. This
approach just seems inefficient from the standpoint that the firm’s
members must speak two deprecation “languages”. This is beginning to change.
Creative Solutions now uses the same depreciation engine for both its
Depreciation Solutions for Windows and its UltraTax tax application.
CCH’s new 32 Bit Profx tax application also offers both tax and book
calculations.
Intuit, Inc. Intuit is beginning to develop a
“suite” of software application for accountants. It now has
its ProSeries tax application, the Lacerte tax line, and Fixed Asset
Manager, a Windows depreciation package. ProSeries Fixed Asset
Manager integrates very closely with Intuit’s Federal tax programs.
Information transfers easily between Fixed Asset Manager and the various
ProSeries forms. Fixed Asset Manager has 35
predefined reports and a custom report writer. Asset labels can be
created using a Wizard approach. It is easy to create customized
asset lists and reports with queries and sorts. Data can also be
exported to other applications in Word, Excel, ASCII, and CSV formats. Fixed Asset Manager provides six
depreciation bases (books) for Federal, state, book, AMT, ACE, and
custom. The system handles calculations for interim and future
depreciation calculations. It can be used to track asset
information such as category, location, manufacturer, and provides
several user-defined fields to meet client specific needs. Asset setup is made easier using asset entry templates that can be used to “pre-enter” common asset information. The system also has a pull-down menu approach for choosing depreciation methods and conventions.
WorthIT Fixed Asset$ WorthIT Fixed Asset$, a 32-Bit
Windows application, is part of a complete suite of asset management
tools from M.S.R. These applications are designed to meet not only
the depreciation information needs of businesses, but also provide
information about asset locations, service history, and self-constructed
asset cost. This software bundle can provide opportunities for
accountants to provide new services to their clients. WorthIT is a very flexible and
complex system. It allows you to design custom depreciation
profiles (books) to furnish book, tax, and what-if information. It
has the capability to prorate costs over multiple assets, to effect
group transfers and disposals, track unlimited partial disposals, and to
simulate disposal scenarios. The applications Task/Activity
feature is used to accumulate all information about a projects cost that
will be capitalized. Fixed Asset$ uses a “wizard”
approach to setup a company with up to 10 levels of organization
(location, division, cost center, etc.). The system’s reporting
capabilities allows for a very extensive amount of customization in the
areas of sorting, sub-totaling, and data presentation. WorthIT Fixed Asset$ has features
not normally found in most CPA firm fixed asset applications, such as
the ability to track information by including the ability to track by
asset locations, maintain service history, allocate costs by project,
monitor assets under construction or catalogue asset specifications.
The add-on WorthIT Image Gallery can be used to store images of asset
pictures or documents such as invoices, service forms, insurance
policies, and other information. Fixed Asset$ also integrates with
Solomon Software, Great Plains Dynamics, and ACCPAC for Windows 3.0. WorthIT offers a reseller program for accountants that want to implement Fixed Asset$ at their client’s offices. WorthIT also offers training as part of their support agreement.
BNA Fixed Assets Next Dimension is
a 32-bit application that runs under both Windows 9X and NT. The
focus here is on size and flexibility. Next Dimension is capable
of handling the largest of depreciation information requirements. Next Dimension is capable of an almost unlimited number of depreciation books (99). Each depreciation element is
maintained separately for each book, including cost, date
placed-in-service, section 179 (bonus depreciation), business %,
depreciation method, rate, convention, and life. An unlimited
number of assets can be managed with up to 2,400 separate short tax
years and automatic determination and application of mid-quarter
convention. Custom depreciation methods are available by selecting
one of 10 methods, 12 property types, five depreciation rates and 10
averaging conventions. Customization and full support for an
unlimited number of depreciation books, including AMT, ACE and E&P
depreciation books. BNA “wizards” make Next
Dimension easy to use. The “Add Asset” wizard enhances data
entry of new assets and a “Dispose Asset” wizard speeds asset
retirements and exchanges. The system uses a table-like
presentation (Asset Viewer) for presenting asset information.
Selecting an asset from the Asset Viewer opens the asset record for
modification. Data entry validation helps the user avoid errors
and the “Edit Book Data” wizard suggests field values from a list of
pre-defined “smart values”. The user can accept the default or
select from other pre-validated values. In many cases, accountants need to
provide fixed asset information before all the prior year’s fixed
asset decisions have been made. To accommodate this situation,
Next Dimension requires no period closing or year-end rollover. It
also provides a complete full audit trail with details on calculations
of expense, gains or loss, and balances by month, quarter or year.
This information is available for all depreciation books and all time
periods. This approach allows for editing “depreciation
critical” fields at any point in an asset’s life, while leaving all
previously reported values unchanged. Keeping with its highly flexible
approach, Next Dimension includes 22 standard reports. All of
which are customizable. Asset information can be printed in full
detail or in summary, grouped by date or by one of five levels of asset
grouping criteria. Report queries may be saved for future use.
Reports can be saved for later use and printed to the screen, printer,
or a file. Tax form worksheets provide assistance in preparing tax
returns. To allow the conversion of information from other applications, fixed asset information can be imported using a text file approach. BNA’s suggested method is to use another application, such as a spreadsheet program to clean up extraneous information, save the data as a CSV (Comma Separated Value) file and then import the information into Next Dimension. To make it easier to get started with Next Dimension, BNA provides a multi-media tutorial.
GoSystems Depreciation Plus GoSystems Depreciation is the
32-bit fixed asset component of the CLR suite of applications for
accounting firms. It was developed for CLR by BNA. It
integrates fixed asset information with the other applications in the
CLR accounting firm software suite, GoSystems Write-up, Business Ties,
and GoSystem Tax. Depreciation Plus features a
“current state” approach to maintaining depreciation information.
There is no closing of the period or any concept of “beginning” or
“end”. This allows for the changing of an assets data at any
time during its life. These features also allow you to view a
company’s assets and books over any desired period of time.
Changes can be made at any point in time and you can choose to change
affected data or retain original values. Priori data integrity is
maintained because all values prior to the change are retained. Wizards are used to create new
company files, add/dispose/exchange/edit assets. The wizards make
it much easier for new users and staff that do not frequently use
Depreciation Plus to efficiently use the system. Assets are
displayed in a table. When an asset is selected, a table brings up
a window with all the asset details. GoSystems Depreciation allows for
up to 99 depreciation books along with full support and customization of
AMT and ACE. Sixteen pre-defined asset types are included and an
unlimited number of asset types can be added or edited. Unlimited
number of assets can be maintained with up to 200 separate short tax
years and automatic determination and application of mid-quarter
convention. Depreciation is calculated automatically and
calculations can be for any number of months, quarters, and years for
any point in time. You can also override calculated information to
“force” a particular value. An audit trail is available for
every depreciation book and any time period. An extensive array of standard reports are included, all of which can be customized. Depreciation projections are also available to support FASB 109 and budget needs. Customized report queries can be saved for later use and pre-defined queries are also provided.
Depreciation Solution for
Windows Creative Solutions’ Depreciation
Solutions for Windows is an easy to use application that is an excellent
successor to the very popular DOS application, Depreciation Solution II.
Depreciation Solution is a 32-bit program that integrates into Creative
Solution’s UltraTax for Windows and Write-Up Solution II applications. Depreciation Solution organizes
information using a file-folder format. Users can customize the
way information is presented on-screen. On-line, context-sensitive
help can be opened at any time as a small window on the screen and will
automatically update and provide instructions as the user moves from
field to field. Six depreciation books are
provided: Tax, ACE, AMT, State, Book and Other. The system
features 7 predefined depreciation methods and allows for the definition
of 99 custom methods. Mid-quarter conventions are determined
automatically and depreciation is recalculated when necessary. Adding assets is a very easy task.
Defaults can be used to duplicate information such as tax, book, and
state information and asset costs. A single purchase of multiple
assets can be “divided” into the required number of “parts” with
a single entry. This feature is also helpful when disposing of
partial assets and many assets for one price. Depreciation
projections are available on a per asset basis. The integration with CSI’s UltraTax application is a very efficient feature. Since depreciation setup is the same in both Depreciation Solution and UltraTax, users only have to learn on system. The system has 8 predefined reports that can be sorted by treatment, method, dates, etc. Typical tax forms and worksheets are also provided. Any system-provided report can be modified to the user’s needs by eliminating any unnecessary columns and selecting new filter criteria. Presentation options can be set to control the arrangement of the columns.
FAS Encore! FAS Encore! from Best Software,
Inc. is well suited for larger organizations. It features
extensive reporting capabilities, as well as features that make it well
suited for in-house implementation at the client’s offices. Encore does a good job converting
data from other applications. An Import Wizard guides the user
when importing files from spreadsheet programs and ASCII text files.
An “Import Helper” provides pre-set wizard formats for importing
fixed asset information from other applications. Best provides extensive on-line
help and reference capabilities in Encore. The Best Depreciation
Guide covers all tax and financial depreciation topics. The system
also features three IRS tables of prescribed MACRS and ADS lives for 200
commonly used assets. FAS Encore! features seven
depreciation “books” per client (tax, internal, state, AMT, ACE, and
two user defined custom schedules). Assets are displayed as one
group in a grid-like format. Double clicking on any asset will
display the details in a form-like presentation. This detail
screen includes “tabs” for disposal, transfer, history, image and
notes. Free-form text can be entered in the notes tab to furnish
additional add details about assets. Handling asset transfers and
consolidating multiple companies can be done quickly and easily.
Consolidated company information is prepared by merging information from
separate companies into one master company. FAS Encore! can also
extract data from one large company into several more manageable,
smaller companies. FAS Encore! easily handles both full and
partial asset transfers, as well as full and partial disposals.
Information can be edited using queries to specify the assets and fields
to be modified. User-defined drop down menus called
“SmartLists” can be defined for many fields to make data entry more
efficient and accurate. Custom settings can be copied from
existing clients to new clients. Password security profiles allow
you to specify the functions each user can access. Encore! has features that will be
of special interest to a firm’s clients. Images of assets and
documentation of warranty, purchase, and other information can be
scanned and attached to Encore assets. Screen customization
features include ten user-defined fields for adding additional
information such as repair services dates. Encore features
integrated bar coding for physically tracking fixed assets. This
capability, FASTrack, provides fixed asset inventory management
features such as check-in/check-out and reconciliation reports.
Encore also links to many popular general ledger packages. FAS Encore! has extensive report writing capabilities that includes a custom report writing tool for specialized reports and graphics. The FAS Report Writer for Windows uses Crystal Reports to easily create custom reports. Report batches can be saved for more efficient printing of reports.
Summary Make sure your current fixed asset
package is Y2K compliant. If you must make a change, pick an
application that provides not only tax and financial statements, but
also can be implemented in your client’s offices. The ability of a prospective
application to convert your exiting information is critically important.
Without this capability, a move to a new application will be very
expensive. Most applications now use a “text file” import
process. Finally, plan the timing of your change. If you cannot make the change in 1998, plan for it immediately after tax season in 1999.
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