How to configure account defaults for fixed assets in iplicit?

This article covers how to configure GL account defaults for fixed assets in iplicit. Account defaults tell iplicit which nominal accounts to use when posting journals for each type of asset movement - capitalisation, depreciation, disposal, impairment, write-off and extraordinary depreciation. Without the correct defaults in place for each movement type, iplicit cannot post the associated journals and the movement will fail.

Before you start

Asset groups must be configured before setting account defaults. Each account default is linked to an asset group. See What are Asset Groups, and how should they be structured if groups are not yet in place.

Document types must also be unlocked and a document series must be active before any asset movement can post. See How to set up document types and document series for fixed assets in iplicit for both steps.

How account defaults work in fixed assets

When iplicit processes an asset movement, it looks up the account default for that asset's group and movement type, then posts to the accounts assigned there. Think of account defaults as routing instructions - you define where each type of journal should go, and iplicit follows those instructions automatically.

The number of account defaults required depends on the movement type:

• Single account - capitalisation and disposal each require one Balance Sheet account only. These movements post directly to the asset value on the Balance Sheet with no corresponding P&L entry required at this stage
• Two accounts - depreciation, write-off, impairment, extraordinary depreciation and revaluation each require both a P&L account (the charge) and a Balance Sheet account (the asset value reduction). Both must be in place before that movement can post correctly

The full list of required accounts for each movement type is covered in the next section.

Account defaults required by movement type

Capitalisation

One account default required:

• 'Capitalisation' - Balance Sheet account; records the asset value on the Balance Sheet when capitalised. This account must be categorised as Balance Sheet in the Chart of Accounts. A P&L account will cause a posting error.

Disposal

One account default required:

• 'Disposal' - Balance Sheet account; removes the asset value from the Balance Sheet on disposal

Write-off

Two account defaults required:

• 'Write-off (P&L)' - P&L account; debit entry recording the write-off loss
• 'Write-off' - Balance Sheet account; clears the remaining asset value

Depreciation

Two account defaults required:

• 'Depreciation charge' - P&L account; debit entry recording the depreciation expense
• 'Depreciation' - Balance Sheet account; reduces the capitalised asset value

Impairment

Two account defaults required:

• 'Impairment charge' - P&L account; debit entry recording the impairment loss
• 'Impairment' - Balance Sheet account; reduces the carrying value of the asset

Extraordinary depreciation

Extraordinary depreciation has its own account defaults, separate from standard depreciation. Two account defaults required:

• 'Extraordinary depreciation charge' - P&L account; debit entry recording the additional depreciation
• 'Extraordinary depreciation' - Balance Sheet account; reduces the capitalised asset value

Revaluation

Two account defaults required:

• 'Asset Revaluation Loss' - P&L account; records any loss arising from a revaluation
• 'Asset Revaluation Reserve' - Balance Sheet account; records the revaluation reserve

Configuring a GL account for use as a fixed asset account default

Before an account can be assigned as a fixed asset account default, it must be correctly configured in the Chart of Accounts.

Step one: Enable the account in the Chart of Accounts

1. Navigate to Chart of Accounts
2. Open the relevant account
3. Tick 'Fixed assets'
4. Confirm the account category is correct - Balance Sheet accounts for asset value accounts; P&L accounts for charge accounts
5. Save the account

Note: the 'Capitalisation' tick in the Chart of Accounts is only required on P&L accounts that need to appear on purchase invoice lines to trigger asset creation via capitalisation rules. It is not required for Balance Sheet accounts used as fixed asset account defaults. Ticking 'Fixed assets' is sufficient for those accounts.

Step two: Assign the account as a default

1. Navigate to Account Defaults 
2. Select 'New' or open an existing default to edit
3. Assign the relevant asset group
4. Select the purpose - the movement type and whether it is the charge or standard account
5. Assign the appropriate GL account
6. Save the default
7. Repeat for each movement type and purpose you need to configure.

Note: an account default without a specific asset group assigned will apply to any asset group not explicitly configured elsewhere. Review this carefully to avoid unintended postings.

Checking your setup

Once defaults are in place, review the account defaults screen with the 'Asset group' and 'Account' columns visible side by side. Confirm every asset group you intend to use has both a charge account and a standard account configured for each movement type. Any gap will cause that movement to fail when processed.

Posting attributes

Before capitalising, confirm that any posting attributes required by your Chart of Accounts rules are correctly defaulted on the asset record. iplicit applies posting attributes from the COA rule automatically when creating asset journals - if these are missing or incorrect, the journals cannot be manually edited after posting. Corrections can be made using the posting attribute amendment function, but this is considerable work across large numbers of journals. It is significantly easier to ensure the correct defaults are in place on the asset before processing.