Capitalizing Assets

Capitalization assigns a financial cost to an asset by linking it to transactions from the suspense account. This is how an asset moves from "New" to having a recorded value.

How Costs Get Into the Suspense Account

Before you can capitalize an asset, the purchase cost must be in the suspense account. This happens when you post a creditor invoice using the Fixed Asset line type. The Fixed Asset line type automatically routes the amount to the suspense account configured in Basic Finance Settings, rather than to a regular expense account.

Important: Fixed Asset invoice lines do not support Job, Task, or Activity values. The cost is a capital expenditure, not a project expense.

Running the Capitalization Wizard

1. Select one or more assets in the grid.
2. Click the Capitalize assets toolbar icon.

Step 1: Select Assets to Capitalize

Capitalization wizard Step 1 - asset selection with exclusion reasons

The wizard shows the selected assets. Assets that are not eligible are flagged with an exclusion reason (shown in orange). Common exclusion reasons:

• “Asset is already capitalized and depreciation has started”: the asset has already been depreciated
• “Asset has been disposed”: disposed assets cannot be capitalized

Use the Show excluded assets checkbox to show or hide ineligible assets. Only eligible assets can proceed.

Step 2: Assign Transactions

Select transactions from the suspense account to allocate to the asset(s).

You can:

• Allocate a single transaction to one asset
• Split one transaction across multiple assets (divided equally)
• Allocate multiple transactions to a single asset

Important: You cannot allocate multiple transactions to multiple assets simultaneously. It must be either one-to-many or many-to-one.

Set the Capitalization date and First depreciation month. The first depreciation month must be in the same month as the capitalization date or exactly one month later, and must be the last day of the month.

Step 3: Review and Confirm

Review the allocation summary and confirm.

WorkBook creates:

• A Capitalization operation on each asset
• Journal entries: Debit asset account, Credit suspense account

Multiple Capitalizations

An asset can be capitalized more than once, for example, if additional costs need to be added later. However, once depreciation has started (the asset has been depreciated at least once), no further capitalizations are allowed. You can only add more cost while the asset is in “Capitalized” status (FirstDepreciationDate equals NextDepreciationDate).

Undo Capitalization

To reverse the last capitalization:

1. Select the asset.
2. Click the Undo last capitalization toolbar icon.
   This is only allowed when:

   • The asset has not yet been depreciated (no depreciation periods have passed)
   • The last operation on the asset is a Capitalization

   The undo creates reverse journal entries and decreases the asset’s initial value. If the initial value drops to zero, the asset returns to "New" status.