Correcting a Property/Asset Purchase Not Initially Tagged as an Asset in
Accounts Payable Module
Revision, Review and Approval History
Revision Date
1/2/2013
Author/Editor
Lindy Salvaleon
Summary of Changes
Initial Draft
1/8/2013
Lindy Salvaleon
Added screenshot for adjusting
multiple asset purchase lumped
into 1 distribution line
2/4/2013
Lindy Salvaleon
Clarified the set of expense account
to be used for property purchases
and the set of contra-expense
account to be used for fixed asset
purchases; Expanded the guidelines
to include verification of
accounting entries journal
generated to GL from AP/AM
related to the asset purchases
2/22/2013
Lindy Salvaleon
Updated for Eduardo’s
comments/suggestions
Reviewer
Estela Cabardo
Team/Role
Technical Solutions Team
Date
1/4/2013
21/FEB/2013
Eduardo Gutierrez
Signed Off By (Name):
Team/Role
Date
Background
CARE’s business process for purchasing assets (both properties and capitalized assets) that need to be
reported in the Property Register in accordance with the CARE USA Property Management Manual is to
identify this as an asset at the time when the purchase requisition is created. By selecting the proper
item category in the requisition line details, this will trigger the system to tag the item as an asset as the
requisition is processed into a Purchase Order (PO) and then in Accounts Payable (AP) for payment and
eventually makes it way to the Asset Management (AM) module for tracking the asset. The financial
information related to the asset flows from Requisition through AM. Once the asset is created in AM,
the non-financial information for the asset (e.g., tag number, manufacturer, serial number, custodian)
will have to be updated directly in AM.
CARE has determined that there were asset purchases that were not associated with the proper item
category that will identify this as an asset when the purchase requisition was processed. As a result the
AP vouchers that were created did not also tag this as an asset and therefore the system did not
automatically create an asset in AM linked to this purchase.
Procedures
Following are the series of steps to follow to properly create the asset/s through the AP module for
those purchases that were not previously classified/identified as an asset at the time of creating a
purchase request. As a consequence of this omission, the item/s purchased was not tagged as an asset
in AP when the voucher was created and therefore did not push this information to AM to create the
asset.
NOTE:
This guideline is only applicable to the scenario where the Business Unit (BU) has not created the
asset manually in AM as an attempt to correct the asset that was not automatically created in AM.
If the BU has already created the asset manually in AM when the information from AP was not pushed
to AM, there is separate guideline for linking AP voucher information to the Asset ID that was
manually created in the AM module. DO NOT use the following guidelines for this second scenario.
1. Locate the voucher that has been processed for which all or some of the distribution lines need to
be tagged as an asset. Navigate to the Voucher Search menu and type in the BU and at least one
other search criteria and click the Search button.
NOTE: Please add additional search criteria such as Voucher ID or Vendor ID to narrow your
search results.
Navigation: Main Menu > Accounts Payable > Vouchers > Add/Update > Voucher Search
The Search results will appear as follows:
2. Click on the link to the Voucher ID that needs to be adjusted/corrected and the Invoice Information
tab of that particular voucher will appear in a new window. Take note of the following information
from this voucher:
 Invoice Number
 Invoice Date
 Accounting Date
 Vendor ID
 Total Invoice Line
3. Scroll down to the Distribution Lines box and click on the Assets tab. Verify that the Asset box is not
checked.
4. Click on the GL Chart tab and take note of the GL chartfields that were used for this particular
transaction/invoice line.
5. Exit from this screen.
6. Create a new Journal Voucher to correct the original voucher and tag the purchase as an asset.
Enter the BU, Vendor ID, Invoice Number and Invoice Date based on the information taken from the
original voucher.
Navigation: Main Menu > Accounts Payable > Vouchers > Add/Update > Regular Entry
Note: Please make sure that the Voucher Style selected is “Journal Voucher”.
7. Click on the Add button and the Invoice Information page will appear. The Accounting Date field will
default to the current date. Please change the accounting date accordingly. Ideally, the accounting
date of the journal voucher should match that of the original voucher. However, if the period in
which the original voucher was posted is already closed, please use the first available date in the
open period/s.
8. Enter the original Voucher ID that is being corrected on the Related Voucher field.
9. Scroll down to the Invoice Lines section. Ensure that the Line Amount field is 0 and populate the
Description field accordingly.
10. Scroll to the Distribution Lines/GL Chart tab. Enter the adjusting entries to be created. On the first
line, manually enter the chartfields to reverse the entry in the original voucher. The Merchandise
Amount and Quantity fields should have the opposite sign of the original entry. For example, if the
original entry had a debit sign, this entry should have a credit sign. On the second line, manually
enter all the correct chartfields (including the Account) to be charged for this asset purchase.
Please enter one line for each unit of asset purchased. For example, if the quantity of assets
purchased is 2, please create 2 distribution lines for each of the assets to ensure that separate asset
IDs will be created for each one. Add additional distribution lines as needed. The sum amount of all
the distribution lines should net to zero.
For multiple quantities of asset purchased, the distribution line will look like as follows:
Note:
Items with unit cost of USD 5,000 or more will have to be tracked as capitalized assets in the Asset
Management module. Please use the capitalized/contra-asset expense accounts in populating the
account chartfield. Do not use the actual expense accounts [(e.g., 521100 (Computer Hardware
Purchase, 540100 (Vehicle Purchase)] as this will result in incorrect account balances in the
General Ledger. Following is a listing of these capitalized/contra-asset expense accounts:
A c c ount Des c r
521199
522199
523199
524199
526199
528199
540199
550199
552199
566999
599999
Computer Hrdware - Capitalized
Computer Software-Capitalized
Communications Eqpt Capitalize
Office Equipment Capitalized
Mach/Other Eqpt Capitalized
Furn & Fixt Capitalized
Capitalized Vehicles - Contra
Capitalized Leasehold Improv
Capitalized Bldg Improvement
Capitalized Intangible
Capitalized Land - Contra/Clea
The rationale for using capitalized/contra-asset expense accounts in AP for fixed assets purchases is
for Commitment Control to be able to run budget check against this purchase. Following is the proforma entry in AP:
Dr. Capitalized/Contra-Asset Expense
Cr. Accounts Payable
Since the Asset box is selected for this accounting line using the capitalized/contra-asset expense
account, this will trigger the creation of a new asset in AM. An accounting entry will be generated in
AM to capitalize the fixed asset for financial reporting purposes and expense the fixed assets for
donor reporting purposes through the use of different Asset Books. Following is the pro-forma
entry in AM:
DONOR Books:
CORP Books:
Dr. Expense
Dr. Fixed Asset
Cr. Capitalized/Contra-Asset Expense
Cr. Capitalized/Contra-Asset Expense
When these AP and AM entries eventually get pushed to the General Ledger (GL), the entries to the
Capitalized/Contra-Asset Expense accounts should offset and should result in a zero balance.
Items with unit cost between USD 500 – USD 4,999 (USD 100 – USD 4,999 in the case of AFG01
and the Latin America BUs) will have to be tracked as property items in the Asset Management
module. Please use the actual expense accounts (e.g., 521100 (Computer Hardware Purchase,
540100 (Vehicle Purchase)) in populating the account chartfield for this purchase. Following is a
listing of these expense accounts:
Unlike the fixed assets purchases that will be capitalized in AM, there are no accounting entries
generated in AM for property items. Only the entry from AP gets pushed to GL that it is why the AP
accounting entry needs to be charged to the proper expense account.
11. Click on the Assets tab. On Line 1, please leave the Asset box unchecked. As previously mentioned,
this will reverse the entry in the original voucher. On Line 2, please make sure that the Asset box is
checked. Until the Asset Box is checked for each distribution line that needs to be tracked as an
asset, there is no integration between AP and AM and the asset will not be automatically created in
AM. Populate the Business Unit and the Profile ID fields as well. Leave the Asset ID field defaulting
to “NEXT”. This is the line that will be pushed to the Asset Management module. Each CI member
has its own set of Profile IDs under their own SetID.
Following is a listing of the Profile IDs that are valid in the system for the USA01 Set ID:
Business Units that need to track properties/assets in accordance with the CARE USA Property
Manual, i.e., items with unit cost of USD 500 or more, should select the appropriate Asset Profile
IDs that start with “RES” if the purchase is made using restricted funds or “UNR” if the purchase is
made using unrestricted funds.
However, there are certain country offices that have a legal requirement to track properties/assets
with unit cost of USD 100 or more. In this case, the business units that fall under this scenario (i.e.,
AFG01 and the Latin America BUs) should select the appropriate Asset Profile IDs that start with
“R100” if the purchase is made using restricted funds or “U100” if the purchase is made using
unrestricted funds.
If the item purchased is a vehicle, there are two profile IDs to select from. Choose the profile ID
with “VEH” if this is a 4-wheel vehicle purchase or “VH_MO” for motorcycle purchases.
12. Click the Save button. A new Voucher ID will be created.
13. Submit the voucher approval. This will then be routed to the designated approver’s worklist to
approve.
14. Click the Sign out button to logout of the system.
Once the journal voucher is approved by all the designated approvers, budget checked and posted,
the next series of steps will be executed by the system automatically via the batch processes:
Note: The processes for this step will be executed by the system as scheduled. Once these
processes run to success, the user can proceed to the next step.)



Voucher Posting
Journal Generate to GL – The journal entry will be processed and posted in GL.
Asset Load Assets process – This loads Payables transactions to the Pre-Interface table
o Sending the asset information to PreAM table
o Retrieving AP and Purchasing information from the PreAM table and send to the Loader
tables

Transaction Loader process – The Asset Management tables are updated with the Payables
and Purchasing Transactions. The system generates a unique Asset ID for each asset pushed
to AM.
15. Search for the newly created Asset IDs and review the financial information pushed from AP to AM
to confirm that the process ran successfully.
Navigation: Asset Management>Asset Transactions>Owned Assets>Basic Add
Click on the link to the new Asset created and the following page will appear:
Review the information in the General Information and Asset_Acquisition Details tabs. These should
contain the financial information loaded into Asset Management that came from AP, such as:
 Acquisition Date and Placement Date will be the same as the Invoice Date
 Acquisition Code should be “Purchased”
 Profile ID will flow from the Assets tab of the Journal Voucher
 The Amount should be the same as the Journal Voucher amount
NOTE: The non-financial information for these newly-created assets will also need to be updated.
This is a non-finance function and falls under the administration function which can be done
separately from this exercise. Please refer to a separate guideline for updating the non-financial
information of an asset.
16. When the new assets are created in AM, the next series of steps will be executed by the system via
the batch process. This will only be applicable to assets that need to be capitalized for financial
reporting purposes but will be expensed for donor reporting purposes:
 Calculate Depreciation – The system will calculate the depreciation on the asset based on
the asset profile associated with the asset.
 Create Accounting Entry – The system will create accounting entries from financial
transactions such as asset addition, adjustments or retirements.
 Depreciation Close – This process will create the depreciation accounting entries for the
period. This process should only be run once for each accounting period, and only after all o
the transaction activity for the period has been completed.
 Journal Generate to GL – The journal entry will be processed and posted in GL.
Note: The processes for this step will be executed by the system as scheduled. Once these
processes run to success, the user can proceed to the next step.)
17. Navigate to the Review Financial Entries page to review the accounting entries generated in AM as a
result of running the processes above.
Navigation: Asset Management>Accounting Entries>Review Financial Entries
Click on the link to the Asset ID in the Search Results and the following page will appear:
Review the accounting entries generated by the system for correctness/accuracy. In the example
above, the capitalization entry and the depreciation entries for October – December has been
created.

For the capitalization entry (ADD Trans Type), the fixed asset account was debited and the
capitalized/contra-asset expense account was credited.
 When this entry is journal generated to GL, this will offset the AP entry against the
capitalized/contra-asset expense account.
18. Click on the Journal tab of the Review Financial Entries page. Note that the Journal ID field for each
accounting line has been populated. These are the GL journal IDs that were created when the
journal generation process was completed. If the journal ID field is blank, it means that the
accounting entry has not yet been journal generated to GL.
Exit from this page.
19. Locate the journals created in GL via the journal generation process from AP and AM relating to this
purchase.
Navigation: Main Menu > General Ledger > Journals > Create/Update Journal Entries
Verify that the accounting lines are the same as the subsystem source. In the above screenshot,
this entry was journal generated from AM.
NOTE:
a. If the item purchased is a capitalized asset, the AP entry against the contra-asset
expense account should be offset by the AM-generated entry against the contra-asset
expense account.
b. If the item purchased is a property item, the AP entry is made against an expense
account and there should not be any AM-generated entry. The asset is created in AM
for tracking purposes only.