0004610: Accounting for Product stock assets and Long term fixed assets should be different

Description

One account for all types of physical assets (P_ASSET_ACCT) is not enough. There is a difference between the 'Short term assets' like Warehouse stock, Materials etc. and 'Long term assets', such as company equipment, machinery, buildings, vehicles. There are law regulations about the Long term assets, defining strict criteria about them - minimum value of the asset, asset type, depreciation plan allowed.

There are two main differences between the Short and Long term assets:
1. Short term assets are intended to be sold for profit (products) or used in production (materials). Long term assets are intended to be used by the company itself.
2. Short term assets form an one-time expense at the moment of sale. Long term assets form an expense each month, as they depreciate.

In my country - Bulgaria - for example, Long term assets are divided in two big groups - Material and Non-material. The group of Long term Material assets is then divided in sub-groups based on the asset type:
- Buildings
- Machinery and equipment
- Vehicles
- Merchandise inventory
- Computer hardware
- Other long term material assets
Each of these asset types has law defined annual depreciation percentage limit. Each asset type corresponds to a specific account. There are also corresponding accounts for depreciation and accumulated depreciation for each group. So, using only P_ASSET_ACCT, A_DEPRECIATION_ACCT and A_ACCUMDEPRECIATION_ACCT is not enough.

For correct accounting of Short term assets detailization level may be lower(it is enough to know total quantity and cost). For correct accounting of Long term assets a more detailed data is needed. Each operation is related with physical item instance, which should have an unique ID number, date of requisition (or date when depreciation begins), purchase value, actual remaining value (which equals Purchase value - Accumulated depreciation) etc. These are needed to form the Accounting report of Depreciations.

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ReleaseCandidate

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feature request

0004267

acknowledged

rmorley

Rules driven accounting entries

Notes
(0168272) SofiaRKohler (reporter) 2024-08-20 14:14	Current assets are assets that a business can convert into cash or use within one year or within the business's normal operating cycle, whichever is longer. Conversely, long-term assets are assets such as https://geometrydashsubzero.io/ [^] that a business plans to use for a long time, usually more than one year, and are not easily converted into cash in a short time. Therefore, you need to carefully consider the issue of short-term and long-term assets for yourself.

Issue History
Date Modified	Username	Field	Change
2008-08-12 12:25	boianv	New Issue
2008-08-12 12:25	boianv	Assigned To	=> cromero
2008-08-12 12:25	boianv	sf_bug_id	0 => 2047712
2008-11-10 13:10	cromero	Assigned To	cromero => pjuvara
2008-11-16 18:38	pjuvara	Status	new => acknowledged
2008-11-16 18:38	pjuvara	Tag Attached: ReleaseCandidate
2008-11-16 18:39	pjuvara	Relationship added	related to 0004267
2008-12-17 11:09	pjuvara	Assigned To	pjuvara => rmorley
2024-08-20 14:14	SofiaRKohler	Note Added: 0168272