Asset disposal

This function is used to save or cancel the disposal of an asset group belonging to one or more sites in a single company.

Before being carried out in real mode, the processing can be run in simulation mode in order to assess the result via the report. The disposal parameters and the selection criteria can be saved to avoid having to enter them again.

The asset disposal can be actual in the case of a transfer or destruction, or provisional in simulation mode.

• Actual issue
  
  The disposal date must be in the current or next fiscal year for each of the managed depreciation contexts (besides, if the company is submitted to the Russian legislation, this date cannot be inferior to the start date of the current period of each context).
  When the disposal involves a Main asset, it is possible to dispose at the same time of the component assets that are linked to it. If these assets are not disposed, they are detached from the main asset. 
   
  If the actual disposal concerns a component asset, this asset is detached from its main asset and becomes autonomous.
   
  When the asset is linked to physical elements:
  - if the overwriting of pending movements has been requested, all physical elements attached to the asset are disposed and the potential movements pending on physical elements are automatically cancelled.
  - if the overwriting of pending movements has not been requested, the assets attached to physical elements with pending movements are left aside by the disposal process.
  When the required conditions are met, a customer BP invoice is automatically generated on exiting the processing (see details below in the process description).
  
   
• Provisional disposal
  
  The disposal date must be superior or equal to the current fiscal year start date (and cannot be inferior to the current period start date if the company is submitted to the Russian legislation).
  When the disposal deals with a Main asset having components, the user can choose to dispose them at the same time. If the component assets are not disposed, they are not detached but remain linked to the main asset.
  If the provisional disposal deals with a component asset, this asset remains linked to its main asset.
  The provisional disposal does not affect the physical elements attached to the asset.

Note:
The disposal is prohibited for the assets fulfilling at least one of the following conditions:
- They are Inactive.
- Their holding type is In template.
- They are in the process of an intra-group transfer.
- They are assets in concession, recorded in a renewal preparation operation.
A retroactive disposal is forbidden when the asset has been depreciated or revalued between the requested disposal date and the end of the current period.

• Disposal cancellation
  
  Only are selected the asset whose disposal:
  
  - has been done in the current or next FYR for each of the managed depreciation contexts,
  - is not due to the termination or the recording of the end of the financial leasing contract to which the asset is linked.
  
  When the disposal, provisional or actual, of a component asset has been done at the same time as its main asset, canceling only the component asset disposal is prohibited. Only the cancellation of the main asset disposal can cancel the disposal of the component asset.

Prerequisites

Refer to documentation Implementation

Screen management

• Management method for the window
• Header
• Tab Parameter definition
• Disposal rules applicable to the standard methods
• Tab Extended selection

This function is composed of:

• a header that is used to specify the processing options and to choose the company and the financial sites to which the assets to be processed belong,
   
• the Action parameters tab used to enter the disposal parameters or to request the cancellation of a disposal,
   
• the Extended selection tab, to select the assets to be processed.

Management method for the window

The management is the same for this window as for all the mass process functions that can be applied to assets.

Process setup

First of all, the user needs to set up the process or to recall an existing one saved under a Memo code, through the [Call] button.

The setup of the processing consists in:

- Entering the processing options. By default, the process is carried out in Simulation mode and generates a Detailed log file presenting the values of the various parameters applied during the process, the details of the old and new values for each of the updated assets and the list of assets containing errors, as well as the error reason.

-Selecting the company and potential other financial sites where the assets are registered.

- Entering issue parameters, or requesting an issue cancellation.

- Carrying out the selection of assets potentially involved in the process (Extended selection tab).

Note: when the process setup is complete, it is possible to save it under an identification code using the [Memo] button. It is then possible to recall it at a later date for use in a revaluation process.

Running the process

Once the setup is done, it is possible to:

• Either directly apply the disposal or disposal cancellation parameters to each of the selected assets by clicking on [OK]. A consistency check of modifications is carried out on the asset and any component asset and their disposal amount is calculated: in the event of an error on an asset, its former values are kept and an error message is inserted in the log file.
   
  Note: the modification of the disposal amount calculated in each asset is authorized. This modification is carried out in the Control window.
   
• - Or go through an intermediate control and adjustment stage of the entered parameters by clicking on the button [Control]. A window is displayed, including two tables.
   
  1/ The first table shows the selected list of assets.
  
  It is used to:
  
  - to view the results of the application of disposal parameters on the assets and their potential component assets,
  to adjust, under given conditions, the disposal amount calculated for each asset.
   
  2/ The second table contains the Net value as well as the P&L amounts for each of the plans for the asset highlighted by the cursor in the first table.

Any modification carried out on the disposal amounts for one or more assets must be confirmed using the [Save] button. To cancel the modifications click on [Cancel].
Once the manual adjustments are completed, click on button [End] to close the control window; the setup entry window is displayed again, which makes it possible to either confirm the mass update by clicking on [OK], or to abort the update by clicking on [End].

Header

Options

• Simulation:
  This box, ticked by default, is used to carry out an disposal simulation for the selected assets. The modification of the assets is not recorded in the database.
  The impact of the processing on the assets can be viewed in the log file displayed at the end of the processing.
  
• Detailed log file:
  A log file is systematically displayed on process completion, recalling the process options, the selection criteria, the disposal setup values as well as the number of assets selected and the number of updated assets.
  
  When this box is ticked, the log file is displayed in the form of a detailed report presenting in addition to the information described above, the list of the issued assets. For each of the assets the following values are displayed: The Ex-tax disposal amount, the amount of VAT invoiced to the buyer, the Accounting Net Value and the P&L amount.

Notes: the viewing and printing of the log files is possible at any time via the Print log file print request of the ATRACE report code, obtained from the Supervisor function in the Print/Group print menu.

Company selection – Site selection

These tables display both the list of managed companies which the user is authorized for, and the list of financial sites linked to these companies which the user is authorized for.

It is necessary to select the company and the sites in which the assets involved in the processing, are registered. After selecting the company, all sites of the companies are selected by default. The user can clear those that are not impacted by the processing.
Provided they belong to the same company, the site(s) involved in the processing can be directly selected, in which case the company to which they belong is automatically selected.

Reminder: the assets must be registered in sites attached to the same company. Selecting a second company, or sites linked to another company, leads to the de-selection of the first company selected, after validation of a confirmation message.

After having selected the company or sites, it is possible to refine the selection by entering other selection criteria in the dedicated Extended selection tab.

Tab Parameter definition

Disposal rules applicable to the standard methods

Tab Extended selection

Processing description

• Issue process
• Issue cancellation process
• Preset queries

Issue process

• An actual disposal includes the following operations:
  
  disposal of a Principal asset :
  
  - If the disposal of its component assets is not requested, they are detached from the main asset and become Autonomous. The main asset retains its status Main.
  - If the disposal of its component assets is requested, they are disposed including those already disposed provisionally.
  
  Disposal of a Component asset:
  
  This asset is detached from the main asset at the time of its disposal and becomes Autonomous.
    
  Disposal of an asset impaired in the period:
  
  - If the cancellation of the impairment losses is requested, the assets impaired in the period will be eligible for the disposal and their impairment loss will be canceled.
  - If the cancellation of the impairment losses is not requested, the assets impaired in the period will not be selected.
   
  Disposal of an asset to which physical elements are attached:
  
  - If the overwriting of the pending movements has been requested, all the physical elements attached to the selected assets will automatically be disposed. If there are movements pending on the physical elements, these movements will automatically be canceled.
  - if the overwriting of the pending movements has not been requested, the assets attached to physical elements with pending movements are left aside by the disposal process.
  The disposed physical elements take on the disposal date and reason of the asset.
  
  Disposal of an asset attached to a granted expense:
  
  The active disposal process automatically activates the forcing flag of the subsidy amount allocated to each subsidized expense linked to the disposed asset. This amount and the depreciation basis of the disposed asset on the subsidy plan will not be revised using the subsidy calculation process anymore.
  The net value of the subsidy plan (i.e. the subsidy re-integration balance) at the disposal day is taken in exceptional charge on the disposal period or the record period of the disposal in the case of a retroactive disposal.
  
  Disposal of an asset linked to a financial leasing contract:
  
  This asset is detached from the contract.
  
  Determination of the asset net value at the issue:
  
  The net value is calculated as follows:
  
  - Charge (according to the disposal rule and/or the depreciation method)
  - Impairment increase to transfer as exceptional depreciation (on a standard plan CRC2002-10)
  - Impairment loss reversal, if the parameter IMLRVEISS - Disposal: Impairment loss reversal (AAS chapter, FAS group), set to: YES
  - Exceptional depreciation, if the Disposal rule has the value: Exceptional depreciation = Net value
  - VAT adjustment if the parameter PCOTVAPMV - Take into account vat+/-values (AAS chapter, VAT group) is set to: Yes: the net value is either reduced by the Additional deduction, or increased by the VAT transfer.
  
  
  Disposal of an asset having a provision balance of exceptional depreciation at the disposal date:
  
  The exceptional balance is taken as a whole. On the disposal fiscal year, the asset can thus be subjected to a provision or a derogatory depreciation increase and to a derogatory depreciation increase due to the disposal.
  
  Disposal of an asset containing an impairment balance on disposal date:
  
  If the company parameter IMLRVEISS - Disposal: Impairment loss reversal is set to Yes, the impairment balance on disposal date is automatically reversed. This impairment loss reversal increases the net value determined after depreciation calculation.
  Notes:
  - it is the impairment balance after the impairment loss reversal transferred as exceptional depreciation.
  - When the following Disposal rule is applied: Exceptional depreciation = NV, the new net value is kept as Exceptional depreciation.
  
  VAT regulation:
   
  The actual disposal of an asset can lead to a VAT adjustment processing on the CoA plan and, if the REGVATIAS - IFRS plan: VAT adj? parameter(AAS chapter, VAT group) is set to Yes, on the IAS/IFRS plan.
  It corresponds to a global adjustment that applies only to the companies subjected to the French tax system. It consists in carrying out globally and at one time all the annual adjustments which the company would be required to carry out until the end of the adjustment period should its situation, as resulting from the concerned event, stay as it is until then.
  
  The process is carried out if the following conditions are met:
  - its holding type is set to In property or In transfer,
  - its CoA or IAS/IFRS accounting nature is set to Fixed Asset in service; it can also be an asset which nature is Fixed asset in process if the REGENCOURS - Fixed Asset in process: VAT adjustment? (AAS chapter, VAT group ) is set to: Yes.
  
  Notes :
   
  1/ The period over which a VAT adjustment can be recorded, is automatically determined according to the Tax type and the VAT adjustment reference date (usually, the date of the asset purchase):
  - For the assets which Tax type is Real estate and were purchased as of 01/01/1996, the regulation period is 20 years (1/20th rule).
  - In other cases, the adjustment period is 5 years (1/5 rule).
   
  2/ The period and the adjustment residual life are displayed in the VAT tab of the Assets management function. These periods apply to whole years: the purchase year and the disposal year thus count as a whole year each.
  
  Adjustment calculation
  
  When an asset is sold, the adjustment calculation rules are different whether the transfer can be taxed or not.
  
  1/ Non taxable transfer (the VAT rate (ISSVATRAT) for the sale is equal to 0). It mainly deals with the sale of buildings.
  For each of the remaining years of the adjustment period, the asset will be considered as used in an exempted industry that does not entitle to deduction. Its taxation coefficient will automatically take the value: 0. The deduction coefficient due to the event will thus also have the value: 0.  
  The adjustment therefore consists in an additional VAT repayment.
  It is calculated as follows:
  (0 - Effective deduction coefficient) x Invoiced VAT x (Adjustment residual life / Adjustment period life)
  
  Notes:
  
  - The transfer year is not counted in the residual life.
  - In the event of a non-taxable transfer, the company can transfer some of the initial invoiced VAT to the buyer, in proportion to the remaining adjustment life. The transferable amount is automatically calculated as follows:
  Transferable invoiced VAT = Initial VAT x Adjustment residual life / Adjustment period life
   
  Example :
   Year N: acquisition of a building: 1,000,000 € ex-tax - Invoiced VAT = 196,000 €
  - Liability coefficient = 0.8
  - Taxation coefficient = 0.5
  - Admission coefficient = 1
  --> Deduction coefficient = (0.8 x 0.5 x 1) = 0.4
  - VAT deduction = 196,000 x 0.4 = 78,400 €
  These coefficients do not change in the first 7 years
  Year N+7: transfer of the building to the company E
  --> Global adjustment carried out by the transferor for the 12 remaining years:
  (0 - 0.4) x (196,000 € / 20) x 12 = - 47,040 € to repay
  
  Possible transfer of VAT to the buyer:
  (196,000 € / 20) x 12 = 117,600 €
  
  2/Taxable transfer (the VAT rate (ISSVATRAT) on the sale is superior to 0).
  For each of the remaining years in the adjustment period, the asset will be considered as used in taxed operations, and its deduction coefficient will thus automatically set to 1.
  The adjustment therefore consists in an additional deduction.
  It is calculated in the following way :
  (1 - Effective deduction coefficient) x Invoiced VAT x (Adjustment residual life / Adjustment period life)

Notes.
- The transfer year is not counted in the residual life.
- In the event of a transfer carried out before 19/10/2005, the amount of the additional deduction cannot exceed the amount of the VAT on transfer invoiced to the buyer.
 
Example:
 Year N: acquisition of a building: 1,000,000 € ex-tax - Invoiced VAT = 196,000 €
- Liability coefficient = 01
- Taxation coefficient = 0.5
- Admission coefficient = 1
--> Deduction coefficient = (1 x 0.5 x 1) = 0.5
- VAT deduction = 196,000 x 0.5 = 98,000 €
These coefficients do not change in the first 3 years
Year N+3: transfer of the building to the company E
--> Global adjustment carried out by the transferor for the 16 remaining years:
(1 - 0.5) x (196,000 € / 20) x 16 = 78,400 € of additional deduction

The VAT adjustment amounts after a transfer (Additional repayment and Transferable amount to the buyer / Additional deduction) are displayed in the Receipt/Disposal tab of the Assets function.

Determination of P&L amounts on transfer:

The definition of the capital gain or loss is done as follows:
Sales price - Net value on disposal completion
--> if the result is negative, it is a Capital loss
--> if the result is positive, it is a Capital gain

The net value taken into account on disposal completion to determinate the +/- amounts on transfer is calculated following the steps indicated in the paragraph above: Determination of the asset net value on disposal completion.

Note: No capital gain or loss is calculated:
- on the Subsidies depreciation plan because this plan does not contain an asset value but rather a part of the subsidy used to finance the whole asset (or part of it),
- on a schedule with a depreciation base equal to 0 because of the accounting allocation of the asset on an Expenses account.

French tax system:
Special feature of the 1976 revaluation: for an asset revalued in 1976, the +/- amount on sales is equal to: Price of sale - Fiscal net value not revalued.

• When the company is subject to income tax (parameter CPYTAXRUL - Taxation rule in chapter AAS, group FAS), this +/- value, determined in the fiscal depreciation plan, is distributed in the short term and/or long term.
  The distribution is performed in the following fashion, according to:
  * the Asset nature (depreciable or not)
  * the Holding duration of the asset in the company, calculated in days starting from the Reference date. When the disposal concerns a main asset and its components, it is the Reference date displayed on the main asset which is taken into account to define whether the P&L amount calculated for each component is Short term or Long term. When the disposal deals with a component asset (detached at the disposal of its main asset), it is its own reference date which is taken into account.
  
  

In the particular event of a transfer completed during an intra-group operation (with the exception of an intra-group sale for which a ST/LT distribution is carried out on the fiscal plan of a French company), the +/- amounts collected on the fiscal plan is not ST/LT distributed.

• When the company is subject to corporate income tax (parameter CPYTAXRUL - Taxation rule in chapter AAS, group FAS), these +/- values are considered to be short term, irrespective of the asset nature and holding duration.
  

BP supplier invoice generation:
 
If the SALINV - Sales invoice to generate (AAS chapter, FAS group) parameter is set to Yes, a BP customer invoice is automatically generated when the reason of the asset disposal is Sales. In this invoice, the information coming from the asset cannot be modified.  The status of this invoice is "Not validated". Its accounting allocation is automatically performed. It is the fixed asset account defined in the accounting codes table, for line 11 - Active Element Sale Product, except for companies under the Portuguese or Angolan legislation. For these companies, the code that is used is either the code defined on line 19 - Profit amount on FA sale, or the code defined on line 20 - Loss amount on FA sale.
If the disposal applies to a main asset and its components, only one customer invoice is generated with as many lines as there are sold assets.
The reference of the sold asset is automatically entered in the Comment field of the invoice line. 
 
Fixed asset update:

The following information is updated financial asset record for the asset and for its components if they have been issued:
- Disposal date
- Disposal reason
- Sale amount
- VAT rule for the disposal
- VAT rate on sales
- VAT due on the sale
- CoA additional deduction
- IAS/IFRS additional deduction
- Buyer
- Invoice reference
- Capital gain or loss reference date for the components updated using the main asset reference date
- the reference and definition of the disposed assets are displayed in red characters

Notes.
1/ Once disposed, the asset can no longer be modified. The information concerning the disposal are displayed in the Receipt/Disposal tab of the Assets management function.
2/ The assets disposed of during the fiscal year of at least one of the contexts or during the following fiscal year can be picked out in the Assets management function using their references and descriptions, displayed in red. They remain present in the Assets left list.
The assets disposed in an earlier fiscal year for all the contexts no longer appear in the Assets left list but are displayed in the Disposed assets left list.
 
Events
- Generation of an Asset disposal event (FASISS), and with an asset in concession managed with the Renewal mode, of a FASCCNISS event - Asset disposal / Provisions.
* The operational effective date is recorded in the EVTDAT field; it corresponds to the disposal date.
* The accounting effective date is recorded in the CPTDATINT field; it corresponds to the latest date among the following: Current period end date, Disposal date.
 - Update 8.0.0 and higher: generation of a classification for sale canceling event when the asset is classified for sale.
- Generation of a Disposal event (PHYISS) for each of the disposed physical elements attached to the disposed assets.
The user can view the events in the Event Journal window that can be accessed from the Other info tab of the Asset management function (Assets, Physical elements).

• A provisional disposal carries out the following operations:
  
  disposal of a Principal asset :
  If the disposal of its component assets is not requested, they are not detached and remain linked to the main asset.
  Disposal of a component asset:
  This asset remains attached to its main asset.
  
  Disposal of an asset linked to a financial leasing contract:
  This asset remains attached to the contract.
  
  Disposal of an asset attached to one or several physical elements:
  The physical elements are not disposed and remained attached to the asset.
  Notes:
  A asset that has been the object of a provisional disposal:
  - remains modifiable,
  - its current period depreciation and FYR calculations are carried out without taking into account its provisional disposal (no end to the depreciation plan on the day of the disposal).
  The provisional disposals are automatically canceled during a Closing process, in the case where the disposal date is less than or equal to the closed period end date or FYR end date.
  

Issue cancellation process

• The information updated on the assets upon disposal are reset using their original values.
•  Update 8.0.0 and higher: canceling the disposal of an asset classified for sale does not lead to the automatic re-classification of the asset for sale. 
  
• When physical elements are attached to the asset, their disposal dates and reasons are cleared.
• The cancellation of the disposal of a main asset automatically generates the cancellation of the disposal of its component assets.
   
  Note: the disposal of a component asset independently from its main asset sets the status of this component to Autonomous. The cancellation of this disposal does not lead to a reattachment to the Main asset, the component retains the status Autonomous.
• Generation of a disposal cancellation event (FASISS) for the asset and for each of the physical elements attached to the asset (PHYISS).
  
  Note:
  
  1/ The cancellation of the disposal of a component asset is not authorized when this asset was disposed at the same time as the main asset which it is linked to. The cancellation must be carried out through the main asset.
  
  2/ The cancellation of an disposal linked to a financial lease contract is not authorized when the disposal is linked to the contract termination or to the recording of the end of the financial leasing contract (disposal reason: End of contract or Contract canceled).
   
• When a customer BP invoice has been automatically generated during the sale of the asset, the invoice must be canceled manually.

Preset queries

The following preset queries are available as standard in the reference folder:

Batch task

This function can be run in batch mode. The standard task FASISS is provided for that purpose.

Specific Actions

• Check
• Memo
• Recall
• Delete Memo

Error messages

• Generic messages

The only error messages are the generic ones.

Tables used

Refer to documentation Implementation