This document summarizes the fixed asset business cycle, including acquisition, depreciation, retirement, impairment, and write up. It defines fixed assets as long-life items purchased for business use rather than resale. The acquisition process records the asset value and capitalization date. Depreciation is then recorded over the useful life using straight-line or other methods. Retirement involves scrapping or selling the asset, with loss/gain calculated. Impairment writes down the value if it decreases. Write up increases the value such as from revaluation.

1. Fixed Assets Business Cycle
‫الثابتة‬ ‫األصول‬ ‫دورة‬
Abdullah Galal
Abdullah Galal
https://www.facebook.com/AbdullahGalal.ERP
https://www.youtube.com/c/AbdullahGalal
https://www.linkedin.com/in/galal/

2. What’s an Asset
• Resources owned or controlled by a Company that has a value
• Classification:
• Cash & Banks
• Receivables
• Inventory
• Investments
• Fixed Assets
What’s an
Asset

3. Fixed Assets
• Items with long useful life, high value, and not purchased to be sold
Classes:
• Land
• Buildings
• Furniture
• Computer equipment
• Computer software
• Machinery
• Vehicles
Fixed
Assets
What’s an
Asset

4. Acquisition
Asset Master Data
Fixed Assets  + 50,000
Cash  - 50,000
Inquiry Acquisition
What’s an
Asset
Fixed
Assets
Class Number Serial Number Name Acquisition Value Capitalization Date
Machinery 100001 XYZ13456 Cutting Machine 50,000 01.01.2018
Asset Register

5. Depreciation
2018 2019 2020 2021 2022
Year 1 Year 2 Year 3 Year 4 Year 5
Asset 50,000
Depreciation -10,000 -10,000 -10,000 -10,000 -10,000 50,000
END
2018 2019 2020 2021 2022
Year 1 Year 2 Year 3 Year 4 Year 5
Asset 50,000
Depreciation -10,000 -10,000 -10,000 -10,000 -10,000 50,000
Accumulated Depreciation 10,000 20,000 30,000 40,000 50,000 50,000
END
2018 2019 2020 2021 2022
Year 1 Year 2 Year 3 Year 4 Year 5
Asset 50,000 0
Expense 50,000
END
2018 2019 2020 2021 2022
Year 1 Year 2 Year 3 Year 4 Year 5
Asset 50,000 50,000 50,000 50,000 50,000 50,000
Depreciation -10,000 -10,000 -10,000 -10,000 -10,000 50,000
Accumulated Depreciation 10,000 20,000 30,000 40,000 50,000 50,000
Net Book Value 40,000 30,000 20,000 10,000 0 0
END
Inquiry Acquisition
What’s an
Asset
Fixed
Assets
Depreciation
Class Number Serial Number Name Acquisition Value Capitalization Date
Useful
Life
Accumulated
Depreciation
Net Book
Value
Machinery 100001 XYZ13456 Cutting Machine 50,000 01.01.2018 5 10,000 40,000
Asset Register

6. Retirement (Write Off)
•Scrap
Net Book Value = Loss
•Sale:
Selling Price – Net Book Value = Loss or Profit
RetirementInquiry Acquisition
What’s an
Asset
Fixed
Assets
Depreciation

7. Impairment (Write Down)
Reduction in Fixed Asset Value
•Impairment Loss  + 5,000
•Asset Value  – 5,000
RetirementInquiry Acquisition
What’s an
Asset
Fixed
Assets
Depreciation Impairment

8. Write Up
Increasing the Fixed Asset Value
•Revaluation Gain  + 5,000
•Asset Value  + 5,000
RetirementInquiry Acquisition
What’s an
Asset
Fixed
Assets
Depreciation Impairment Write Up

9. Thank you
Abdullah Galal