Asset Management Terminology

Certain terminology is important to know in regard to asset items in Vision.

Asset items are stored in the Equipment Info Center. You can create asset items directly in the Equipment Info Center, or have Vision 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 Info Center, 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 Info Center, Transaction Center, and Purchasing applications in Vision.

Term	Description
Asset Item	In the Equipment Info Center, equipment items for overhead projects are referred to as asset items. Vision capitalizes and depreciates asset items over time, or you can amortize them if they are capital leases or prepaid items such as prepaid insurance. You create asset items from a purchasing item with a category type of Capital Items. Asset items are the only Equipment Info Center items that can be depreciated or amortized in Vision. You maintain information for the depreciation or amortization calculation for asset items, and assign employees to asset items, in the Equipment Info Center. 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, Vision calculates depreciation or amortization. You can depreciate asset items from the Equipment Info Center. 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, you can use the Associate to Existing Asset field to associate an AP voucher line item with an existing asset item in the Equipment Info Center. 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, Vision calculates the depreciation basis for an asset item using the information that you enter on the GL Cost tab in the Equipment Info Center. Calculation for depreciation basis for your GL Book: (Acquisition Cost x Business Use Percentage) – Salvage Value Similarly for any additional books you have, Vision calculates the depreciation basis for any additional books for an asset item using the information that you enter on the Additional Books tab in the Equipment Info Center. Calculation for 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 Info Center, equipment items for regular projects are referred to as equipment items. These are usually billable items that you do not depreciate. Equipment items in Vision 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	You can use Depreciation Processing in the Asset Management application to run depreciation and amortization processing for your company's general ledger or "GL book," which is based on Generally Accepted Accounting Principles (GAAP) for your company's financial statements. In addition, you can have Vision calculate depreciation and amortization differently than how it is calculated for your general ledger by using "additional books," if necessary. For example, you can set up an additional book to have Vision 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 Vision, you process an impairment using Transaction Entry to enter a journal entry. In the Equipment Info Center, 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 in Vision 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. You specify settings for purchasing items in three places: Before you set up purchasing items, you must set up system-wide item categories and specify a type for each category on the Item Categories tab in Configuration > Purchasing & Inventory > System Settings. You set up purchasing items in Item Master Configuration in Configuration > Purchasing & Inventory > Item Master. You specify item categories for a company on the Item Categories tab in Configuration > Purchasing & Inventory > Company. If you do not have the Purchasing module activated, but you have the Asset Management application activated, you still set up a master list of purchasing items in Item Master Configuration.
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 firm can elect to use the section 179 deduction instead of recovering the cost by taking depreciation deductions. In Vision the section 179 deduction applies only for any additional books that you set up in Vision, not for your GL book. You set up section 179 limits for your tax years on the Section 179 tab in Configuration > Asset Management. On the Additional Books tab in the Equipment Info Center, you enter the section 179 deduction amount for an asset item. You 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 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 Info Center. 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 Info Center that have already had depreciation processed for them. If an asset item created directly in the Equipment Info Center has not had depreciation processed for it, you can change its project directly on the General tab in the Equipment Info Center.