Asset disposal

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

Before carrying out the processing in real mode, you can run it in simulation mode to assess the result by using the report. You can save the disposal parameters and the selection criteria 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.

When the disposal involves a main asset, you can dispose of the component assets that are linked to it at the same time. If the component 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 is requested, all physical elements attached to the asset are disposed and the potential movements pending on physical elements are automatically canceled.
• If the overwriting of pending movements is not 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 exit.

Provisional disposal

The disposal date must be superior or equal to the current fiscal year start date.

When the disposal involves a main asset with components, you can dispose of the components 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 is for a component asset, this asset remains linked to its main asset.

The provisional disposal does not affect the physical elements linked to the asset.

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 prohibited when the asset has been depreciated or revalued between the requested disposal date and the end of the current period.

Disposal cancellation

The following assets are only selected if:

• Their disposal has been done in the current or next fiscal year for each of the managed depreciation contexts.
• Their disposal 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 of a component asset, provisional or actual, has been done at the same time as its main asset, canceling only the component asset disposal is prohibited. You can only cancel the disposal of the component asset by canceling the main asset disposal.

Prerequisites

Process overview

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

Disposal rules applicable to the standard methods

Rules considered	Method
Disposal end of previous month Disposal end of current month Disposal end of previous semester Disposal end of current semester Disposal end of previous fiscal year Disposal end of current fiscal year	Can be applied to all methods except: CA - Amort./Gross val. RE - Residual HL - Swiss straight-line HD - Swiss declining
No charge on the disposal date	Can be applied to the following methods: DB - Belgian declining SCD - Spanish continuous declining rate SD - Spanish declining rate IT - Ordinario / Anticipato LP - French straight-line LV - Linear beyond the null VN LB - Belgian straight-line RE - Residual (days)
First asset transferred to the concession	Can be applied to the following mode: CA - Amort./Gross val.
Exceptional depreciation = Net value	Can be applied to all methods except: IT - Ordinario / Anticipato

Screen management

• Header
• Parameter definition tab
• Extended selection tab

This function is composed of:

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

Process setup

To begin, you need to set up the process or to recall an existing one saved under a Memo code, by selecting the Call button.

To set up the processing:

• Enter the Processing options. By default, the process is carried out in Simulation mode and generates a Detailed log file presenting:
  • The values of the parameters applied during the process.
  • The details of the old and new values for each of the updated assets.
  • The list of assets containing errors with the error reason.
• Select the Company and potential other Financial sites where the assets are registered.
• Enter issue Parameters, or request an issue Cancellation.
• From the Extended selection tab, carry out the selection of assets that could be involved in the process.

Running the process

When the setup is done, you have two options.

The first option is to directly apply the disposal or disposal cancellation parameters to each of the selected assets by selecting OK.

A consistency check of modifications is carried out on the asset and any component asset and their disposal amount is calculated. If it encounters an error, the asset keeps its initial values and an error message is inserted in the log file.

The second option is to go through an intermediate control and adjustment stage of the entered parameters by selecting the Control button. A window with two tables displays.

The first table shows the selected list of assets. You can use it to see the results of the application of disposal parameters on the assets and their potential component assets, and to adjust, under given conditions, the disposal amount calculated for each asset.

The second table contains the Net value as well as the P&L amounts for each of the plans of 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 by selecting the Save button. To cancel the modifications, select the Cancel button instead.

When the manual adjustments are completed, select the End button to close the control window.

The setup entry window displays again, and you can either:

• Confirm the mass update by selecting OK.

• Cancel the update by selecting End.

Header

The header contains the processing options. Use it to select the company, as well as the site or sites in which the assets are registered.

Options

Simulation: You can use this checkbox, selected by default, to carry out a disposal simulation for the selected assets. The modification of the assets is not recorded in the database. You can see the impact of the processing on the assets in the log file that displays after the processing.

Detailed log file: A log file always displays on process completion, recalling the process options, the selection criteria, the disposal setup values and the number of assets selected and the number of updated assets. When you select that checkbox, the log file displays as a detailed report presenting the list of the issued assets, in addition to the information described above. For each of the assets, the Ex-tax disposal amount, the VAT invoiced to the buyer amount, the Accounting Net Value and the P&L amount display.

Company and site selection

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

You need to select the company and the sites in which the assets involved in the processing are registered. After selecting the company, all of its sites are selected by default. You can clear those that are not impacted by the processing.

If they belong to the same company, the site(s) involved in the processing can be directly selected. In this case, the company to which they belong is automatically selected.

After selecting the company or sites, you can refine the selection in the Extended selection tab.

Parameter definition tab

This tab allows you to request the disposal or the disposal cancellation of the assets.

Disposal of the assets

For the disposal of the assets, you need to indicate:

• Whether it is a provisional disposal or an actual disposal.
• Whether asset components linked to the main assets coming from the selection, must also be disposed.
• If you must dispose of assets that were impaired during the period, in which case you need to cancel their impairment loss. If the impairment loss cancellation is not requested, these assets are automatically excluded from the selection.
• If you must select assets attached to physical elements with a movement pending, in which case you need to authorize the overwriting of the movements pending. If the overwriting of the pending movements is not requested, the assets attached to physical elements with pending movements are left aside by the disposal process.
• The disposal date.
• The disposal reason.
• The disposal rule enabling you to define the disposal day according to the entered disposal date. However, this rule is considered only if it can be applied to the depreciation method of the plan. The list of the methods on which each rule can be applied is provided below.
• The amount type and the sales amount.
• The information related to the management of the VAT rates on sales, such as:
  • The tax code, when the asset is disposed with the sale reason.
  • The disposal VAT rule to be applied. Refer to the Description of the disposal process below for details on the VAT regulation process related to transfers.
• The information linked to the sales invoice.

Disposal cancellation

When the cancellation of an asset disposal is requested, the disposal can no longer be entered.

The disposal cancellation takes place only when:

• The disposal has been done in the current or next fiscal year for each of the managed depreciation contexts.
• The disposal is not linked to the cancellation or the recording of the end of the financial leasing contract to which the asset is linked.

Only the assets that correspond to these criteria are selected.

Extended selection tab

Use this tab to enter the asset selection criteria.

You can enter a criterion per line, with each criterion being linked to the next one by the And/Or logical operators.

The process for selection criteria entry is as follows:

• Enter or select a field from the Fixed Asset table (FXDASSETS).
• Select an operator among All, Equal, Not equal to, Greater than or equal to, Less than, Less than or equal to, Like. The Like operator is valid only for numeric fields. It allows the use of wild cards.
• Enter a value. You can see the list of available values for the chosen field when these values are contained in a local menu or in a table, such as miscellaneous table, common table, accounting table, and so on.

You can also:

• Enter the criteria in the form of an expression.
• Enter a selection formula by calling the formula editor.

Process descriptions

• 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 the component assets is not requested, they are detached from the main asset and become Autonomous. The main asset retains its Main status.

If the disposal of the 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 are eligible for the disposal and their impairment loss is canceled.

If the cancellation of the impairment losses is not requested, the assets impaired in the period are not selected.

Disposal of an asset to which physical elements are attached

If the overwriting of the pending movements is requested, all the physical elements attached to the selected assets are automatically disposed.

If the overwriting of the pending movements is not requested, the assets attached to physical elements with pending movements are left aside by the disposal process.

Disposal of an asset attached to a granted expense

The active disposal process automatically activates the checkbox 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 at the disposal day, for example the subsidy re-integration balance, is taken in exceptional charge on the disposal period or the record period of the disposal for 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 IMLRVEISS - Disposal: Impairment loss reversal parameter (AAS chapter, FAS group) is set to Yes.
• Exceptional depreciation, if the Disposal rule if the value Exceptional depreciation equals to the Net value.
• VAT adjustment if the PCOTVAPMV - Take into account vat+/-values parameter (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 considered as a whole.

On the disposal fiscal year, the asset can 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 IMLRVEISS - Disposal: Impairment loss reversal parameter (AAS chapter, FAS group) 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.

VAT regulation

The actual disposal of an asset can lead to a VAT adjustment processing on the CoA plan and, if the REGVATIAS - IFRS ledger: 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 the same 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 - Fas in process: VAT adj parameter (AAS chapter, VAT group ) is set to Yes.

The period over which a VAT adjustment can be recorded is automatically determined according to the Tax type and the VAT adjustment reference date, which usually corresponds to 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 (1/20 rule).
  
• Otherwise, the adjustment period is 5 years (1/5 rule).

The period and the adjustment residual life are displayed in the VAT tab of the Assets management function. These periods apply to whole years, so the purchase year and the disposal year 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.

Non taxable transfer: the VAT rate on sale (ISSVATRAT) is equal to 0, which is often the case for 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 0 value. The deduction coefficient due to the event will thus also have the 0 value.

For that reason, the adjustment 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)

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 €.

Taxable transfer: the VAT rate on sale (ISSVATRAT) is more than 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 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)

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) display in the Receipt/Disposal tab of the Assets function.

Determination of profit and loss 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 considered on disposal completion to determine the +/- amounts on transfer is calculated following the steps indicated in the Determination of the asset net value at the issue section.

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, or part of the asset.
  
• 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 equals to: Price of sale - Fiscal net value not revalued.

When the company is subject to income tax, based on the CPYTAXRUL - Taxation rule parameter (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 according to:

• The Asset nature, whether it is 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, the Reference date displayed on the main asset is considered 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 that is detached at the disposal of its main asset, its own reference date is considered.
  
  

	Profit amounts		Loss amounts
Element nature	Life < 2 years	Life = 2 years	Life < 2 years	Life = 2 years
Depreciable	Short-term	ST within the limit of the fiscal depreciation used, LT beyond	Short-term	Short-term
Non depreciable	Short-term	Long-term	Short-term	Long-term

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 are not ST/LT distributed.

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

BP supplier invoice generation

If the SALINV - Sales invoice to generate parameter (AAS chapter, FAS group) 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 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 updates 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
  

When disposed, the assets can no longer be modified. The information concerning the disposal displays in the Receipt/Disposal tab of the Assets management function.

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. They remain in the Assets left list.

The assets disposed in an earlier fiscal year for all the contexts no longer display in the Assets list but display in the Disposed assets list instead.

Events: Generates an Asset disposal event (FASISS). Also, with an asset in concession managed with the Renewal mode, generates an Asset disposal / Provisions event (FASCCNISS).

• 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 Current period end date and Disposal date.
• Generating an classification for sale canceling event when the asset is classified for sale.
  
• Generating a Disposal event (PHYISS) for each of the disposed physical elements attached to the disposed assets.
  

You can see the events in the Event Journal.

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 remain attached to the asset.
  

An asset that has been the object of a provisional disposal remains editable. Its current period depreciation and fiscal year calculations are carried out without considering its provisional disposal. The depreciation plan does not end on the day of the disposal.

The provisional disposals are automatically canceled during a Closing process when the disposal date is less than or equal to the closed period end date or fiscal year end date.

Issue cancellation process

The information updated on the assets upon disposal are reset, using their original values.

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.

A Disposal cancellation event (FASISS) generates for the asset and for each of the physical elements attached to the asset (PHYISS).

The cancellation of the disposal of a component asset is prohibited when this asset was disposed at the same time as the main asset it is linked to. The cancellation must be carried out using the main asset.

The cancellation of a disposal linked to a financial lease contract is prohibited when the disposal is linked to the contract termination or to the recording of the end of the financial leasing contract. In this case, the disposal reason is 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:

Code	Title	Contents
FXOUTEX	Asset disposals in the fiscal year	List of the assets issued in the current fiscal year.

Batch task

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

Specific actions

• Check
• Memo
• Recall
• Delete Memo

Check

You can use this button to: Apply the disposal or disposal cancellation parameters on the selected assets. Display a control window enabling you to see the result of the application of these parameters on the assets and any component assets, and to adjust, under given conditions, the calculated disposal amount for each. A first table contains the list of the selected assets and their potential components. This list can be updated by deleting the lines corresponding to the assets to be excluded from the process. When activated, the checkbox Detach reminds you that the disposal of the components has not been requested and that they will be detached upon disposal processing. The following information displays for each of the assets that are the object of a disposal: The disposal amount. Its value depends on the setup carried out: It can be equal to 0 if no sales amount has been entered or if the component asset has been disposed with its main asset and the sales amount has been completely distributed to the main asset. It can also correspond to the net value of the asset in the setup depreciation plan or it can be the result of the distribution of a global sales amount entered in the setup, depending on the chosen distribution key. When for rounding reasons, the calculation leads to a difference between the global sales amount and the sales amount total for each asset, this difference is transferred to the sales amount of the last asset. When the disposal amount is calculated using the distribution of a global sales amount, you can modify the calculated amounts. The VAT owed on disposal amount. This amount is calculated using the information entered in the parameters. This amount is automatically recalculated if the sales amount is modified and if the VAT rule has the value VAT owed on the sales. It can be modified. The IAS/IFRS and CoA additional deductible VAT amounts. The IAS/IFRS and CoA balance sheet values. The sales invoice reference. A second table displays the depreciation schedules of the asset when you highlight it with the cursor in the first table. For each plan is displayed: the Currency of the context management, the Net value at disposal date, the Capital gains or losses, as well as Short and long term capital gains or losses for French companies. You can either Cancel or Save the modifications done in this window by selecting the corresponding button. When the manual adjustments are completed, select the End button to close the control window. This action displays the setup entry window again, which allows you to either confirm the mass update by selecting OK, or to cancel the update by selecting End.

Memo

Select this action to save the current settings to a Memo code that can be reused later. The memo is linked to your user profile, not to the function or the screen. Note - informationThe STD memo code is associated with the screen and is loaded immediately when you open the function. Note - informationFor more information on the advanced use of the Memo action, refer to the documentation on the General ergonomics of SAFE X3 Software.

Recall

Select this action to enter a Memo code. It loads the settings associated with the code.

Delete Memo

Select this action to delete a Memo code.

Error messages

• Generic messages

The error messages are the generic ones.

Tables used