Sigma Asset is a comprehensive and flexible system for handling fixed asset accounting. It enables you to create and maintain an asset register, in which details of all assets are held. There is wide scope for the way in which asset depreciation is calculated. Asset values such as acquisition cost, nett book value and disposal value are maintained, and assets can be revalued or relifed readily.
Parameters are provided to allow you to specify exactly how you want the system to record, depreciate and report on the assets in the asset register. The parameters also hold default values for such items as the accounts to be posted in the general ledger and the length of time event records are to be kept on file.
Once the asset register is set up, you use the system to record events during the life of each asset: acquisition and disposal, usage figures (for vehicles, for example), insurance valuations, write-offs and so on.
Asset management information can be readily obtained at any time in the form of screen displays and printed reports.
The Asset Register
The asset register is central to the operation of the fixed assets system. An asset register holds all the necessary details of the assets. These details include:
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Full descriptions of each asset. The information includes ownership (purchased, hire purchased, rented or leased, capitalised or non-capitalised), the handling of multiple assets (such as the splitting of such assets between locations and cost centres), balance sheet classes and so on.
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Cost and life information. Cost information includes such items as acquisition cost, projected scrap value, write-off threshold and so on. You can base the measurement of asset life on time or usage.
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Depreciation categories. The system provides powerful facilities for specifying asset depreciation. You can specify the depreciation basis and rate, and choose from a number of widely-used depreciation formulae. You can also specify any special treatment of an asset in its years of acquisition and disposal.
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Where appropriate, you can keep accounts of any associated grant assistance.
Once you have set up an asset register, the system allows you to update it easily, by adding new assets or recording events relating to assets during their lifetime, such as revaluation.
A powerful feature of the Sigma Asset system is the ability it gives you to treat groups of related assets as a single category. When you are setting up the asset register, for example, you define a series of asset types (such as vehicles, furniture or machinery). Each asset type defines defaults for such things as depreciation category, description, balance sheet classes and cost centre. When you add a new asset to the register, you specify the asset type to which it belongs. The system automatically takes the details from the asset type description, and you can modify them for individual assets if you wish.
Depreciation
Sigma Asset offers you great flexibility in the depreciation of assets. The way in which depreciation is applied can be specified for groups of assets of the same type, or even for individual assets.
Depreciation can be time-based or usage-based. With time-based depreciation, the asset is depreciated by some proportion of its value every period. You may apply different weightings to each period within the year. If you wish, you can use this facility to reflect different period lengths (four or five weeks, for example), or to cater for seasonal variations that are specific to your business. With usage-based depreciation, the amount by which the asset loses value in a given period of time is determined by the amount of usage in that period (mileage covered by a vehicle, for example). For an asset with usage-based depreciation you may specify a time-based fallback depreciation category to be used if the usage in a period does not reach a specified level. This ensures that a reasonable calculation of depreciation is maintained.
You specify the depreciation formula and the rate or life to be used for each asset. Five different formulae are available:
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Straight line, where the amount of depreciation in each period is the same.
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Declining balance, where the current value of the asset is used to calculate depreciation.
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Remaining life, where the depreciation increases initially, then declines towards the end of the asset's life.
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Sum of year's digits, which is similar to declining balance in effect, except that the asset value finally reaches zero (or the specified minimum depreciated value).
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Accelerated cost recovery, where you allocate weightings that determine the depreciation in each year of the projected life of the asset.
You may want to calculate depreciation on an asset in different ways for different purposes. Sigma Asset allows you to specify two depreciation categories for each asset (or asset type) and you can then carry out the calculation using the appropriate category.
You can initiate the calculation of depreciation at any time, but you will usually do so at the end of a period. You can also change the value of an asset by, for example, revaluation or relifing. When specifying the depreciation parameters for assets, you can further specify any special treatment in the years of acquisition and disposal.
Depreciation can also be applied to the value of grants, using the same formulae, to write a deferred grant off to profit and loss over the asset's life.
Events and Asset History
Each key event during the lifetime of an asset is recorded in the asset history files.
The information in these files forms the basis for reports. The possible events include:
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Acquisition
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Transfer (from one location or cost centre to another)
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Disposal and write-off
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Recording of usage figures for usage-based depreciation methods
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Revaluations and relifings
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Receipt and repayment of grants
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Change of depreciation method
You can set up parameters to specify how long you want records of each type of event to be retained in the history files.
Standard Reports
The standard Sigma Asset reports summarise the information in your asset registers in a variety of ways. The reports are:
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Asset schedule
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Main events listing
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Nominal postings report
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Depreciation last calculated report
The reports have been designed using the user-defined reports facility. This means that if you wish to amend the layout of a report (perhaps to fit your own pre-printed stationery) or its contents (perhaps to include an extra field which is of interest to you) you may do so with ease.
The Asset register interfaces with the Sigma Nominal Ledger