## (COL) Working with Fixed Assets for Colombia

This chapter discusses how to:

- Calculate depreciation adjustments for inflation.

- Calculate the end of an asset's useful life.

- Work with cost inflation adjustments.

See Also

Setting Up Cost Accounts for Depreciation and Inflation Adjustments for Colombia

### Calculating Depreciation Adjustments for Inflation for Colombia

This section provides an overview of depreciation adjustments for inflation, lists prerequisites, and discusses how to:

- Calculate the depreciation inflation adjustments.

- Set processing options for Adjustment by Inflation Depreciation/Amortization (R76C1202).

#### Understanding Depreciation Adjustments for Inflation

Inflation can have a significant effect on the value of an organization's assets. For accurate financial reporting and income tax, Colombian companies apply annual inflation adjustments to revalue all fixed assets. Inflation adjustments affect the calculation of depreciation and amortization and can result in an increase or decrease of taxable income. You use the asset's adjusted balances to calculate depreciation.

Run the Adjustment by Inflation Depreciation/Amortization report (R76C1202) to calculate the depreciation inflation adjustments for the organization. The report lists detailed and summary information for each asset, including:

- Adjustment percentage for the affected year. (Porcentaje de Ajuste Año Gravable [PAAG])

- Period.

- Values.

- Monthly inflation adjustment calculation.

First, you should run the report in proof mode. Carefully review the detailed and summary information for accuracy, and correct any errors, before you run the report in final mode. After you run the report in final mode, post the journal entry that the system generates.

Adjustment by Inflation Depreciation/Amortization (R76C1202)

When you run this report in proof mode, the system:

- Validates the accounts to which the system posts the depreciation inflation adjustment journal entries.

- Prints a report that shows the amount that will post to each depreciation inflation adjustment account when you run the program in final mode.

  This report also shows calculated results.

When you run this report in final mode, the system:

- Validates the accounts to which the system posts the depreciation inflation adjustment journal entries.

- Prints a report that shows the amount that posted to each depreciation inflation adjustment account, such as the monetary correction amount.

  If any errors occur, the depreciation inflation adjustment process will not generate the journal entry.

- Creates the depreciation inflation adjustment journal entry and monetary correction.

  A processing option specifies the document type for these journal entries. The batch type is G..

- Creates records in the Journal Entry Transactions table (F0911Z1) and automatically sends the transactions to the Account Master table (F0911).

- Creates a journal entry that you need to post to the JD Edwards Enterprise One General Ledger and JD Edwards Enterprise One Fixed Assets systems.

  After you post the journal entry, the system displays the month inflation adjustment value on the Work with Cost Summary form.

  See Verifying Depreciation Information.

  See Processing GL to Fixed Assets.

Data Selection for Adjustment by Inflation Depreciation/Amortization

Enter the ledger or ledgers in which you are working in the data selection. Also, specify that the account type (data item CHCD) equals (2).

#### Prerequisites

Before you calculate the depreciation inflation adjustments:

- Set up cost accounts by company for depreciation inflation adjustments.

- Run version ZJDE76C12 from the Journal Entry Batch Processor program (R09110Z) for the F0911 table, with the processing option in final mode, before you run the Adjustment by Inflation Depreciation/Amortization program in final mode. You must run version ZJDE76C12 so that the system uses version ZJDE76C12 when it creates the inbound transactions when it calculates the depreciation inflation adjustment.

  See Processing Batch Journal Entries.

#### Calculating the Depreciation Inflation Adjustments

Select Fixed Assets (G76C16), Adjustment by Inflation Depreciation/Amortization.

#### Setting Processing Options for Adjustment by Inflation Depreciation/Amortization (R76C1202)

Processing options enable you to set default processing values for programs and reports.

Process

1. Preliminary (' ') / Final (1) | Specify whether to run the report in proof or final mode. Values are: Blank: Pproof mode. 1: Final mode.
2. Period No Ap (accounting period number) | Specify the current accounting period. The system uses this period number to identify and read the balances of the month prior to the month in process, and also uses the current period number to determine posted-before (PABO) and posted-after-cutoff (PACO) warning messages.
3. Fiscal Year | Specify the 4-digit fiscal year. The system uses this year to identify and read the balances of the month prior to the month in process.
4. PAAG (adjustment percentage for the affected year) (Porcentaje de Ajuste Año Gravable) | Specify the rate or percentage that the system applies to the cost and depreciation amount to calculate the adjustment.
5. Document Type | Specify the document type code for the journal entry of depreciation inflation adjustment. Several prefixes are reserved for document types, such as vouchers, invoices, receipts, and timesheets. The reserved document type prefixes for codes are: P: Accounts payable documents. R: Accounts receivable documents. T: Time and Pay documents. I: Inventory documents. O: Purchase order documents. S: Sales order documents.
6. Date | Specify the general ledger date in which the journal entry is generated. Enter the date with or without slashes (/) or dashes (-) as separators. If you leave the this processing option blank, the system uses the current date.
7. Ledger Type | Enter a value that exists in the Ledger Type (09/LT) UDC table to identify the type of ledger for the journal entry for depreciation inflation adjustment. Ledger types include AA (Actual Amounts), BA (Budget Amount), or AU (Actual Units).

Subledger

Debit Subledger | Specify the number of the subledger for the debit entry. Values are: Number: Enter the subledger number. Blank: The system creates the journal entry without the subledger. AFE: The system retrieves the subledger number from the Asset Master File table (F1201).
Debit Subledger Type | Enter a value that exists in the Subledger Type (00/ST) UDC table to specify the subledger type for the debit entry.
Credit Subledger | Specify the number of the subledger for the credit entry. Values are: Number: Enter the subledger number. Blank: The system creates the journal entry without the subledger. AFE: The system retrieves the subledger number from the Asset Master File table (F1201).
Credit Subledger Type | Enter a value that exists in the Subledger Type (00/ST) UDC table to specify the subledger type for the credit entry.

No Batch Trans.

1. Enter the Batch number for Journal Entry generation | Specify the number that the transmitter assigns to the batch. During batch processing, the system assigns a new batch number to the JD Edwards EnterpriseOne transactions for each control (user) batch number it finds. Do not modify this value when the program is running.

### Calculating the End of the Useful Life for Colombian Assets

This section provides an overview of the Life End Date program (R76C1208), lists prerequisites, and discusses how to:

- Calculate the end of the useful life of assets.

- Set processing options for Calculating the End of Useful Life (R76C1208).

#### Understanding the Life End Date Program

Any asset generally has a limited life and, over a period of time, loses its value to a company. Depreciation charges are used to account for the loss in value and are spread over the useful life of the asset.

Run the Life End Date report (R76C1208) to validate the fixed assets that finished depreciating in the month that you specify (the net book value in the historical ledger is zero (0)) and that had any depreciation in that month (the balance in the depreciation expense account is not zero (0)).

When you run this report in proof mode, the system:

- Validates the accounts where the system will post the end-of-useful-life journal entries.

- Prints the report showing the amounts to be posted in each depreciation inflation adjustments account when executed in final mode.

  This report also shows the calculated results.

When you run this report in final mode, the system:

- Validates the accounts where the system will post the end-of-useful-life journal entries.

- Prints the report showing the amounts to be posted in the depreciation inflation adjustments accounts, such as the monetary correction account.

  If there is an error, the end-of-useful-life process does not create the journal entry.

- Creates a journal entry for depreciation inflation adjustment and depreciation monetary correction accounts to be considered for the calculation.

  These journal entries have a document type as specified in the processing option on the Process tab. The batch type is G.

- Creates records in the Journal Entry Transactions table (F0911Z1) and automatically sends the transactions to the Account Master table (F0911).

- Creates a journal entry that you need to post to the JD Edwards EnterpriseOne General Accounting and JD Edwards EnterpriseOne Fixed Assets systems.

  After you post the journal entry, the system displays on the Work with Cost Summary form the end of useful life value that is in the inflation adjustments ledger. You can verify how the system updated the depreciation method in the inflation adjustments ledger by reviewing the Depreciation Information form.

  See Verifying Depreciation Information.

  See Processing GL to Fixed Assets.

Run the report first in proof mode. Carefully review the report for accuracy and correct any errors.

Run the report in final mode to update the depreciation method to 00 and to validate the net book value for the inflation adjustments ledger. If the net book value for the inflation adjustments ledger is not zero (0), the system creates a journal entry that makes the depreciation inflation adjustments account balance to 0 for the net book value of the inflation adjustments ledger.

#### Prerequisites

Run version ZJDE76C12 from the Journal Entry Batch Processor program (R09110Z) for the F0911 table, with the processing option in final mode, before you run the Life End Date program in final mode. You must run version ZJDE76C12 so that the system uses version ZJDE76C12 when it creates the inbound transactions.

See Processing GL to Fixed Assets.

#### Calculating the End of Useful Life

Select Fixed Assets (G76C16), Life End Date.

Data Selection for Life End Date

Enter the ledger or ledgers in which you are working. Also, specify that the account type (data item CHCD) equals (2).

#### Setting Processing Options for Life End Date (R76C1208)

Processing options enable you to specify default processing values.

Process

1. Preliminary (' ') / Final (1) | Specify whether to run the report in proof or final mode. Values are: Blank: Pproof mode. 1: Final mode.
2. Period Number | Specify the current accounting period. The system uses this period number to identify and read the balances of the month prior to the month in process, and also uses the current period number to determine posted-before (PABO) and posted-after-cutoff (PACO) warning messages.
3. Fiscal Year | Specify the 4-digit fiscal year. The system uses this year to identify and read the balances of the month prior to the month in process.
4. G/L Date | Specify the GL date to use. Enter the date with or without slashes (/) or dashes (-) as separators. If you leave this processing option blank, the system uses the current date.
5. Document Type | Specify the document type code that identifies the origin and purpose of the transaction. Several prefixes are reserved for document types, such as vouchers, invoices, receipts, and timesheets. The reserved document type prefixes for codes are: P: Accounts payable documents. R: Accounts receivable documents. T: Time and Pay documents. I: Inventory documents. O: Purchase order documents. S: Sales order documents.

No Batch Trans

1. Enter the Batch Number for Journal Entry generation | Specify the number that the transmitter assigns to the batch. During batch processing, the system assigns a new batch number to the JD Edwards EnterpriseOne transactions for each control (user) batch number it finds. Do not modify this value when the program is running.

Ledger

1. Historical Ledger | Specify the historical ledger that the system uses. This ledger type must be created in the UDC 09/LT. The system uses this information to validate that the net Value in Books from the Historical Ledger equals zero, and that it has depreciation expense in the month to determine the fixed assets that ended useful life in that month.
2. Inflation Adjustment Ledger | Specify the ledger that the system modifies when creating the journal voucher. This ledger type must be created in the UDC 09/LT. The system uses this information to validate that the net Value in Books from the Inflation Adjustments ledger is not zero, and then it creates a voucher in this ledger by using the depreciation inflation adjustment accounts (P76C1202).

### Working With Cost Inflation Adjustments in Colombia

This section provides an overview of cost inflation adjustments, lists prerequisites, lists forms used to review and revise cost accounts, and discusses how to:

- Calculate cost inflation adjustments.

- Set processing options for Adjustment by Inflation to Cost / Deferred Charge (R76C1201).

#### Understanding Cost Inflation Adjustments

For accurate financial reporting and income tax, Colombian companies adjust the cost amounts of their assets for inflation. These adjustments are recorded in fixed asset inflation adjustment accounts according to the government’s requirements. The asset’s adjusted cost, along with the depreciation inflation adjustment, is used to calculate depreciation.

Note. To adjust current period cost adjustment amounts for inflation, make the cost adjustments before you perform inflation adjustment for the current period. Otherwise, make the cost adjustments after you perform inflation adjustment for the current period.

You set up cost inflation adjustments accounts by company, entering the information by each company and cost account and specifying the related credit (monetary correction) and debit accounts that the system uses to generate the inflation adjustment journal entry. If you use only one ledger, the debit account is the cost inflation adjustment account. If you use two ledgers (subledger for inflation adjustments), the debit account is the same as the cost account. In either case, the credit account is the monetary correction account.

Calculating Cost Inflation Adjustments

Run the Adjustment by Inflation to Cost / Deferred Charge report (R76C1201) to calculate the cost inflation adjustments for the organization.

The report lists detailed and summary information for each asset, including:

- Adjustment percentage for the affected year. (Porcentaje de Ajuste Año Gravable [PAAG])

- Period.

- Values.

- Monthly inflation adjustment calculation.

First, you should run the report in proof mode. Carefully review the detailed and summary information for accuracy, and correct any errors, before you run the report in final mode. After you run the report in final mode, post the journal entry that the system generates.

When you run this report in proof mode, the system:

- Validates the accounts to which the system posts the cost inflation adjustment journal entries.

- Prints a report that shows the amount that will post to each cost inflation adjustment account when you run the program in final mode.

  This report also shows calculated results.

When you run this report in final mode, the system:

- Validates the accounts to which the system posts the cost inflation adjustment journal entries.

- Prints a report that shows the amount that posted to each cost inflation adjustment account, such as the monetary correction amount.

  If any errors occur, the cost inflation adjustment process does not generate the journal entry.

- Creates the cost inflation adjustment journal entry and monetary correction accounts that are applied in this calculation.

  A processing option specifies the document type for these journal entries. The batch type is G.

- Creates records in the Journal Entry Transactions table (F0911Z1) and automatically sends the transactions to the Account Master table (F0911).

- Creates a journal entry that you need to post to the JD Edwards EnterpriseOne General Accounting and JD Edwards EnterpriseOne Fixed Assets systems.

  After you post the journal entry, the system displays the month inflation adjustment value on the Work with Cost Summary form.

Data Selection for the Adjustment by Cost / Deferred Charge Report

In the data selection, enter the ledger or ledgers in which you are working, and enter the account type. For example, if you enter account type 1 (cost), the system reads the F1202 table records that are related to the cost account.

#### Prerequisites

Before you calculate the cost inflation adjustments:

- Set up cost accounts by company for cost inflation adjustments.

  See Setting Up Cost Accounts for Depreciation and Inflation Adjustments for Colombia.

- Run version ZJDE76C12 from the Journal Entry Batch Processor program (R09110Z) for the F0911 table, with the processing option in final mode, before you run the Adjustment by Inflation to Cost / Deferred Charge program in final mode. .

  Generate this version so that when the system calculates the cost inflation adjustment, it creates the inbound transactions and runs the process in batch mode, using the version ZJDE76C12.

#### Forms Used to Review and Revise Cost Accounts

Form Name | FormID | Navigation | Usage
Work With Adjustment by Inflation to Cost / Deferred Charges | W76C1201A | Fixed Assets (G76C16), Adjustment by Inflation to Cost / Deferred Charge (P76C1201) | Review and select cost accounts.
Adjustment by Inflation to Cost / Deferred Charges Revision | W76C1201B | Select an account to revise in the detail area, then click Select on the Work With Adjustment by Inflation to Cost / Deferred Charges form. | Revise existing cost accounts.

#### Calculating the Cost Inflation Adjustments

Select Fixed Assets (G76C16), Adjustment by Inflation to Cost / Deferred Charge (R76C1201).

#### Setting Processing Options for Adjustment by Inflation to Cost / Deferred Charge (R76C1201)

Set these processing options to specify the mode in which you run the report, the default values and subledgers to use, and the batch number of the transaction.

Process

1. Preliminary (' ') / End (1) | Enter 1 to run the report in final mode. Leave this processing option blank to run the report in proof mode.
2. Period No Ap | Specify the current accounting period. The system uses this period number to determine posted-before and posted-after-cutoff warning messages.
3. Fiscal Year | Specify the 4-digit fiscal year for which you run the report.
4. PAAG (adjustment percentage for the affected year) (Porcentaje de Ajuste Año Gravable) | Specify the rate or percentage that the system applies for inflation adjustment for the month.
5. Document Type | Enter a value that exists in the Document Type (00/DT) UDC table that defines the transaction type.
6. Date | Specify the general ledger date for the journal entry.
7. Subledger Type | Enter a value that exists in the Subledger Type (09/LT) UDC table that identifies the type of ledger for the journal entry for cost inflation adjustment.

Subledger

1. Debit Subledger and Subledger Type | Specify the number of the subledger to use.
2. Credit Subledger and Subledger Type | Specify the number of the subledger to use.

No Batch Trans.

1. Batch Number | Specify the number that the transmitter assigns to the batch. During batch processing, the system assigns a new batch number to the transactions for each control (user) batch number it finds. Important! Do not modify this value when the report is running