Asset lifecycle
Every capitalized asset moves through the same arc: acquisition → in-service → ongoing → disposal. The asset record carries the asset through each stage; the rules that apply at each stage drive the depreciation expense, the maintenance schedule, and the disposal posting. This page walks through what happens at each transition + the fields that drive the behavior.
TL;DR — Open Fixed Assets → Register → New asset to create one manually, or open Acquisitions to confirm an asset auto-suggested from a Procurement receipt. The asset stays in In acquisition until you mark it In service — that's when depreciation starts. Ongoing changes (custody, location, condition) ride on the record. Disposal ends the book life.
Before you start
- Confirm the workspace's capitalization threshold + useful life table by category. These are workspace-level finance settings; the per-asset entry inherits from them.
- For assets coming from Procurement, the receipt should already show the PO number, supplier, invoice cost. Don't re-key data the receipt has.
- For self-constructed assets (in-house build), have the construction-in-progress (CIP) ledger ready — the accumulated CIP cost is the basis when the asset goes in service.
Stage 1 — Acquisition
| Field | What it does | Accepted values / default |
|---|---|---|
| Procurement receipt (auto-suggested) | Most acquisitions come from a PO receipt at or above threshold. | Asset candidate appears in **Fixed Assets → Acquisitions**; you confirm + complete the missing fields. |
| Manual entry | Donation, found asset, intra-company transfer in, acquisition adjustment. | Use **New asset**; document the source. |
| Construction in progress (CIP) | Asset being built — accumulate costs as they post. | Asset stays in CIP until put in service; depreciation does not start until in-service date. |
| Acquired with a business | M&A acquisition — many assets at once. | Bulk import with the acquisition basis allocated per purchase-accounting rules. |
Confirm an acquired asset
Open Fixed Assets → Acquisitions
Candidates from receipts appear here.
Pick the candidate
The receipt context is pre-filled: supplier, PO, cost, quantity, description.
Verify the categorization
Asset category drives useful life + depreciation method. The suggested category comes from the item or PO line; finance confirms.
Add the missing operational fields
Asset tag number, custody (who's responsible), location, serial number, model. These the receiver typically captures on the floor; the asset accountant verifies.
Save as In acquisition
The asset enters In acquisition. Depreciation does not start yet; the cost sits in the CIP-equivalent GL account.
Stage 2 — Place in service
The asset starts depreciating when it's available for its intended use — not when it was received, not when it was paid for. The in-service date is the critical input.
Open the asset → Place in service
The in-service form opens.
Pick the in-service date
Today, the receipt date (if same day), or a documented later date (e.g. install completion). The date drives the depreciation-start period.
Confirm useful life + method
Inherited from category; per-asset override allowed with a documented reason. Common methods: straight-line (default), units-of-production, double-declining-balance, sum-of-years- digits, MACRS (US tax).
Confirm salvage value
Estimated residual at end of useful life. Often zero; non-zero salvage reduces the depreciable base.
Pick depreciation convention
Half-month (default for buildings + many GAAP setups), mid-quarter, mid-year, first-month. MACRS conventions are auto-selected when MACRS is the method.
Save → In service
The asset is now active. The first period's depreciation posts at the next month-end close.
Stage 3 — Ongoing
Most of an asset's life is ongoing. The fields that change are operational — custody, location, condition — and finance reads them for the audit but doesn't post on them.
| Field | What it does | Accepted values / default |
|---|---|---|
| Custodian | The employee responsible for the asset. | Pulls from HCM. Transferring custody is a one-click flow; the change is logged. |
| Location | Where the asset physically lives. | Site / building / floor / room hierarchy. Audit-relevant for existence testing. |
| Condition | Operational status. | Operational / under-repair / out-of-service / impaired. Out-of-service may drive a depreciation suspension. |
| Maintenance schedule | Planned service intervals. | Optional; if set, the asset record surfaces overdue items. |
| Capital improvement | Adding cost to an existing asset. | Increases book value + (usually) extends useful life. Posts a separate cost layer to the asset. |
Transfer custody
Open the asset → Custody
Current custodian + history appear.
Pick the new custodian
HCM lookup. The new custodian receives a confirmation request (they'll acknowledge in their notification inbox).
Optionally update location
Common — custody change often comes with a physical move.
Save
The change posts to the asset history. The prior custodian is no longer responsible from the transfer date.
Stage 4 — Disposal
Disposal ends the asset's life on the books. The disposal flow handles the four common types (sale, scrap, total loss, donation) and computes the gain or loss correctly.
See Impairment and disposals for the full disposal flow.
Every field, explained
| Field | What it does | Accepted values / default |
|---|---|---|
| Asset tag | Your internal identifier (matches the physical tag). | Required; unique workspace-wide. |
| Asset category | Classification driving useful life + posting. | Buildings / leasehold improvements / IT equipment / machinery / vehicles / furniture / software, etc. |
| Acquisition cost | Capitalized basis (purchase + shipping + install). | Pulled from PO / receipt where applicable; manually entered for non-PO acquisitions. |
| Salvage value | Estimated residual at end of life. | Often zero; non-zero reduces depreciable base. |
| Useful life | Periods over which to depreciate. | From category; per-asset override needs a documented reason. |
| In-service date | When the asset is available for intended use. | Drives depreciation start; not the same as receipt date in general. |
| Depreciation method | How expense is spread. | Straight-line / DDB / SYD / units / MACRS. |
| Depreciation convention | Within-period start assumption. | Half-month / mid-quarter / mid-year / first-month / MACRS. |
| Custodian | Responsible employee. | HCM-linked. |
| Location | Where the asset is. | Site / building / floor / room. |
| Condition | Operational status. | Operational / under-repair / out-of-service / impaired. |
Common gotchas
- "In-service date is the receipt date." Usually but not always — equipment that requires installation isn't in service until installation completes. Picking the wrong date by a quarter cascades into a depreciation restatement.
- "This is an expense, not an asset." If it's below threshold OR if it's repairs / maintenance that doesn't extend useful life, expense it. The capitalization-vs-repair line is fact-specific; finance reviews questionable items.
- "The custodian left the company." Custody auto-suggests transfer on HCM separation. Don't leave the asset assigned to a separated employee — the audit will flag.
- "Asset moved buildings; can I just edit the location?" Editing in place is fine for minor moves. For inter-site moves with different jurisdictional tax implications, use the inter-location transfer flow so property-tax filings reflect the move.
- "I want to start depreciating earlier to catch up." Don't back-date. Use a documented correction with a cumulative catch-up posting if the prior periods were truly in error. Back-dating is a misstatement.
Troubleshooting
| Error code | What it means | Fix |
|---|---|---|
ASSET_TAG_DUPLICATE | Tag number already exists. | Choose a different tag or verify the existing isn't actually the same asset. |
ASSET_BELOW_CAPITALIZATION_THRESHOLD | Save attempted on an asset below threshold. | Either raise basis with documented additions or post as expense via Procurement. |
ASSET_IN_SERVICE_DATE_FUTURE | In-service date is in the future. | Wait to mark in service until the date is today or past; record the planned date in notes. |
ASSET_USEFUL_LIFE_OVERRIDE_REQUIRES_REASON | Per-asset life override attempted without rationale. | Add the documented reason; the override is recorded for audit. |
ASSET_CUSTODIAN_INACTIVE | Custodian is a separated employee. | Transfer to an active employee. |
How this is recorded
Every state change — acquisition, in-service, custody transfer, location change, capital improvement, condition update — writes to the asset's history ledger. The ledger is the artifact the auditor reads to confirm the existence + completeness assertions: where did the asset come from, who's responsible, where is it, when did each change happen. Retention follows the workspace's audit-log retention FINANCE floor at minimum.
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