Skip to main content

Purchasing an Asset

Purchasing an asset in ABNERP involves creating the asset record, optionally automating asset creation from a purchase, and following the purchase and accounting cycle.

Assets can be purchased manually or automatically created when receiving an item in a Purchase Receipt or Purchase Invoice. This ensures accurate asset tracking and proper accounting entries.

1. Prerequisites​

Before purchasing a new asset, ensure the following are configured:

  • Asset Category is created
  • Item is created with \u2018Is Fixed Asset\u2019 enabled
  • Optional: Enable \u2018Auto Create Assets on Purchase\u2019 in the item master if you want assets to be created automatically upon receipt

Item Master

2. How to Purchase an Asset​

  1. Follow the standard purchase cycle for the asset:
  • Create a Purchase Order (if required)
  • Receive the item via Purchase Receipt
  • Submit a Purchase Invoice
  1. Enter the asset location in the Items table of the Purchase Receipt or Purchase Invoice.
  2. On submission of the Purchase Receipt:
  • If Auto Create Assets is enabled, ABNERP will automatically create the Asset record.
  • You can then update other details manually in the Asset form.

2.1 Accounting Entries​

  1. With Capital Work in Progress (CWIP) Enabled
  • On submitting the Purchase Receipt, the CWIP account is debited instead of the asset account.
  • This represents that the asset is purchased but not yet available for use.
  • When the asset becomes available for use, CWIP is credited, and the corresponding asset account is debited.
  1. With CWIP Disabled
  • The receipt entry is posted directly to the asset accounts defined in the Asset Category.
  1. Temporary Liability Account
  • ABNERP uses \u201cAsset Received But Not Billed\u201d (a liability account) when submitting a Purchase Receipt.
  • On submitting the Purchase Invoice, this account is debited/reversed.
  1. Purchase Receipt
  2. Purchase Invoice