Fixed Asset Management – Troubleshoot Revaluations

During the course of managing your assets in NetSuite’s Fixed Asset Management (“FAM”) module, you are bound to revalue a few assets.  Revaluing an asset means the current value of the asset is more or less than the original cost, the asset life has changed, depreciation method has changed, or the residual value has changed. NetSuite’s FAM module can help you revalue and post the correct GL impacts to your financial statements. If you would like to learn how to revalue an asset in the FAM module, please visit SuiteAnswers: Revaluation of an Asset (https://suiteanswers.custhelp.com/app/answers/detail/a_id/19284/loc/en_US).  

Before you process a revaluation, here are some tips and troubleshooting hints.  

• • • Check the Revision Rules set in the Asset record to make sure the GL impacts are taken in the right periods.   
      • • Current Period: when this is selected, all the GL impacts from the revaluation will be taken at the current period, meaning the revision will be retroactive.  
        • Remaining Life: when this is selected, the revision is only applied to the asset from this point forward.  
        • Example: Lifetime is changing from 5 years to 15 years, meaning the monthly depreciation of a $6,000 asset is changing from $100 to $33.33 a month and two months of depreciation has passed. 
          1. 1. Under Current Period, you will see: 
                1. 1. Month 1 depreciation: $100 
                   2. Month 2 deprecation: $100 
                   3. Month 3 revaluation: $200-66.66 = $133.34, is added back to Net Book Value 
                   4. Month 3 depreciation: $33.33 
             2. Under Remaining Life, you will see:  
                1. 1. Month 1 depreciation: $100 
                   2. Month 2 depreciation: $100 
                   3. Month 3 depreciation: $33.33 

• • • FAM asset’s Net Book Value and Cumulative depreciation should match.  If it does not, there are usually 2 issues:  
      • • User manually added Journal Entries: To find this error, you can compare the journal entries in the depreciation GL account with the journal entries created from the FAM module.   
        • The beginning depreciation amounts are incorrect: This one is a little trickier.  To find this error, you have to go back to your midlife asset upload and compare the cumulative deprecation adds up to the depreciation GL account for the starting period.  
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    • Manually fix back end FAM records.  The back end records are FAM Depreciation History and FAM Asset Value. Manipulating these records can change the values on the asset records and are typically not GL impacting.   
      • • Why would you want to go in and make changes to the back end records? Generally it is not recommended.  However, there may be circumstances where the FAM module function does not fit the revaluation scenario you need. In this case, you can change the back end records so that the values and depreciation is calculated the way you need.  
        • Example: Continuing with the scenario above -- if the Current Period rule was selected but you only want to go back 1 month instead. NetSuite does not have a setting to determine how far back the revaluation impact need to occur. In this instance, you would need to manipulate the back end records so that only 1 month of revaluation is counted. 

Depending on the number of assets that are being revalued, troubleshooting or running this function can be tedious and error prone.  If you need any assistance or guidance on this function, please reach out to us.  We are happy to help in any capacity.  

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