Asset Management Terminology

You should be familiar with asset management terminology.

Asset items are stored in the Equipment hub. You can create asset items directly in the Equipment hub, or have Deltek create them automatically from purchase orders, change orders, release orders for blanket purchase orders, and AP vouchers. You maintain depreciation and amortization information for asset items in the Equipment hub, and you process depreciation and amortization for asset items in the Asset Management application.

The follow table provides information about the asset management terminology used across the Asset Management, Equipment hub, Transaction Center, and Purchasing applications.

Term	Description
Asset Item	In the Equipment hub, equipment items for overhead projects are referred to as asset items. Deltek capitalizes and depreciates asset items over time, or you can amortize them if they are capital leases or prepaid items such as prepaid insurance. Create asset items from a purchasing item with a category type of Capital Items. Asset items are the only Equipment hub items that can be depreciated or amortized in Deltek. Maintain information for the depreciation or amortization calculation for asset items, and assign employees to asset items, in the Equipment hub. You process depreciation or amortization for asset items, transfer or split asset items, and dispose of asset items in the Asset Management application.
Amortization	When you run Depreciation Processing in the Asset Management application, Deltek calculates depreciation or amortization. You can depreciate asset items from the Equipment hub. You can amortize them if they are capital leases or prepaid items, such as prepaid insurance.
Associate an AP Voucher Line Item with an Existing Asset Item	In Transaction Center > Transaction Entry, use the Associate to Existing Asset field to associate an AP voucher line item with an existing asset item in the Equipment hub. This association increases the depreciation basis for the existing asset item; the two costs are combined for depreciation purposes.
Capital Item	Asset items are also referred to as capital items.
Depreciation Basis	The depreciation basis is the amount of an asset's cost that you can claim as a deduction over the asset's life or recovery period. For your GL book, Deltek calculates the depreciation basis for an asset item using the information that you enter on the GL Cost tab in the Equipment hub. Calculation of depreciation basis for your GL Book: (Acquisition Cost x Business Use Percentage) – Salvage Value For any additional books that you set up, Deltek calculates the depreciation basis for an asset item using the information that you enter on the Additional Books tab in the Equipment hub. Calculation of depreciation basis for additional books: (Acquisition Cost x Business Use Percentage) + Additional Costs – Salvage Value – Additional First Year Depreciation – Section 179 Deductions
Equipment Item	In the Equipment hub, equipment associated with regular projects is referred to as equipment items. These are usually billable items that you do not depreciate. Equipment items cannot be depreciated as asset items can. You can create equipment items from a purchasing item whose category type is Equipment.
GL Book and Additional Books	Use Depreciation Processing in the Asset Management application to process depreciation and amortization for your company's general ledger or GL book. Calculations are based on Generally Accepted Accounting Principles (GAAP) for financial statements. If necessary, you can also have Deltek calculate depreciation and amortization differently than how it is calculated for your general ledger by using "additional books." For example, you can set up an additional book to calculate depreciation and amortization for tax purposes, based on the United States Internal Revenue Service's (IRS) depreciation guidelines, or for other non-financial reporting. Journal entries that post depreciation and amortization to your general ledger are created for your GL book. However, depreciation and amortization for additional books are not posted to your general ledger.
Impaired Asset Item (Impairment)	A fixed asset becomes impaired when its fair market value suddenly drops below the value of its carrying value (acquisition cost less accumulated depreciation), and the loss is not recoverable. When this occurs, you reduce the asset's value on your Balance Sheet, and you recognize a loss on your Income Statement. In Deltek, you process an impairment using Transaction Entry to enter a journal entry. In the Equipment hub, you record the impairment by adding an impairment to the Acquisition Cost grid on the GL Cost tab, reducing the useful life in years on the GL Book tab, or doing both. Entering an impairment changes the depreciation calculation going forward for the asset item.
Purchasing Items, Item Categories, and Item Category Types	Asset items and equipment items are created from purchasing items. Asset items are created from purchasing items whose category type is Capital Items. Equipment items are created from purchasing items whose category type is Equipment. Specify settings for purchasing items in three places: Before you set up purchasing items, you must set up enterprise-wide item categories and specify a type for each category on the Item Categories tab in Settings > Purchasing & Inventory > System . Set up purchasing items in Settings > Purchasing & Inventory > Items Master. Specify item categories for a company on the Item Categories tab in Settings > Purchasing & Inventory > Company. If you do not have the Purchasing application but you have the Asset Management application, you still set up a master list of purchasing items in Settings > Purchasing & Inventory > Items Master.
Section 179 Deduction	The section 179 deduction is set by the United States government and allows businesses to deduct the purchase price of assets that are leased or purchased during the tax year. Your enterprise can elect to use the section 179 deduction instead of recovering cost by taking depreciation deductions. The section 179 deduction applies only for any additional books that you set up in Deltek, not for your GL book. Set up section 179 limits for your tax years on the Section 179 tab in Settings > Accounting > Asset Management. On the Additional Books tab in the Equipment hub, enter the section 179 deduction amount for an asset item. Review section 179 information in Asset Management > Section 179 Review.
Source Asset Item and Receiving Asset Item	When you split an asset item, the asset item that you are splitting is referred to as the source asset item. The one or more asset items that are receiving amounts from the source asset item are referred to as receiving asset items.
Split an Asset Item	When you split an asset item in Asset Management > Transfer/Split Processing, you move its acquisition cost, salvage value, and any accumulated depreciation to one or more other existing asset items. The asset item that you are splitting is referred to as the source asset item. The asset items that are receiving amounts from the source asset item are referred to as receiving asset items.
Transfer an Asset Item	When you transfer an asset item in Asset Management > Transfer/Split Processing, you are changing the project that is assigned to it on the General tab in the Equipment hub. You must use transfer processing to change a project for asset items that were created from accounts payable vouchers, purchase orders, change orders, and release orders, and for asset items that were created directly in the Equipment hub that have already had depreciation processed for them. If an asset item created directly in the Equipment hub has not had depreciation processed for it, you can change its project directly on the General tab in the Equipment hub.