I'm no accountant, but it sounds fine to me as an intermediate step
to make processes more flexible.
-David
On Dec 4, 2006, at 10:32 AM, Si Chen wrote:
David,
Invoices are definitely economic events, I agree.
Here's the rationale for the "Uninvoiced Fixed Asset Receipt," and
it is similar to the reasonable for the "Uninvoiced Item Receipt":
it is to decouple of the value of the receipt or creation of a
fixed asset from accounts payable invoices. To wit, you can have
these scenarios which this account would solve better:
1. You buy a fixed asset worth $1 million, but the vendor's
invoice also includes $50,000 of shipping and $150,000 for set up.
So you can do this:
DR Fixed Asset $1 million
CR Uninvoiced Fixed Asset Receipt $1 million
DR Uninvoiced Fixed Asset Receipt $1 million
DR Shipping $50,000
DR Setup $150,000
CR Accounts Payable $1.2 million
2. You manufactured a fixed asset worth $1 million in house, so
you can do this
DR Fixed Asset $1 million
CR Uninvoiced Fixed Asset Receipt $1 million
DR Uninvoiced Fixed Asset Receipt $1 million
CR WIP Inventory, Labor, expenses, etc. $1 million
You can imagine there are some other scenarios where this would apply.
On Dec 3, 2006, at 1:00 AM, David E Jones wrote:
Hmmm... invoice are _definitely_ "economic events", or artifacts
that have a direct financial impact on a company and therefore
when finalized cause GL entries to be posted. That's the normal
way of doing things. An order is received and there is generally
no GL entry at that point. There are GL entries needed during
fulfillment (inventory issuance), invoicing, receiving payments, etc.
Maybe this isn't what you meant though. I agree that Si's use of a
"Uninvoiced Fixed Asset Receipt" account seems a little funny.
When a Fixed Asset is received you would get an invoice along with
it from the vendor so it would be an unpaid invoice, or payables
entry.
-David
On Dec 1, 2006, at 5:21 PM, Chris Howe wrote:
I know you want to want to link all of these into
automated actionable steps that make sense to your
business processes but you must remember:
General Ledger entries are ONLY for economic events.
Receipt of an invoice is NOT an economic event. If
you receive a fixed asset you:
Debit: Fixed Asset
Credit: Accounts Payable
If you want to create a relationship between the fixed
asset and an invoice, great. If you want to create a
relationship between the invoice and a vendor's
account, great. If you want to create a relationship
between a general ledger entry and an invoice or a
fixed asset, great. But under no circumstance should
you record a non economic event in the general ledger.
--- Si Chen <[EMAIL PROTECTED]> wrote:
David,
I think what should happen is this:
When any fixed asset is created, if we know the
ownerPartyId, then we
can create:
Debit Fixed Asset (or a specific FixedAsset GL
account)
Credit Uninvoiced Fixed Asset Receipt
Then, when you have a purchase invoice with a fixed
asset item
created, you can do this:
Debit Uninvoiced Fixed Asset Receipt
Credit a Payable of some kind--Accounts
Payable? I'm not sure -
often fixed assets are bought with loans.
Then we'd have to think about doing the depreciation
calculations,
that's what I think could be complicated.
Best Regards,
Si
[EMAIL PROTECTED]
Best Regards,
Si
[EMAIL PROTECTED]
