Configuration – Depreciation Policies

The Depreciation Policies screen in Syrinx SP Configuration\”Accounts/Invoicing”\Depreciation Policies is used to set the policies used when adding new hire fleet assets to the system:

Depreciation Policies can be set up as either straight-line over a given number of months, reducing balance by a given percentage per month, or a ‘custom’ policy where you can dictate explicitly the percentage value after each month:

Note: When creating a new custom policy (the third option), it is set up by default to depreciate according to a reducing balance of a given percentage per year over a given number of years.  

On the detail screen you can also set a residual value:

The residual value can either be set as a particular amount, or as a percentage of the cost of the asset.

If you want your assets to depreciate to their residual at the end of the term of its associated depreciation policy, you should enable the ‘Depreciate to Residual Value?’ option on the ‘Accounts’ tab of Configuration\System Options\Accounts.  By default, Syrinx will depreciate an asset until it reaches the residual value and then stop depreciating even if there is time remaining on the item’s depreciation policy.  Enabling the ‘Depreciate to Residual Value?’ option means that Syrinx will depreciate the difference between an item’s purchase price and residual value over the full term of the depreciation policy meaning that an item will depreciate less per period over a longer period of time.

Note: This option should be set prior to running the initial valuation.  Enabling/Disabling the option once items have begin depreciating may result incorrect depreciation calculations.

Configuration – Set Default Depreciation Policies

The policy used to depreciate each asset is set on the asset itself.  If a company database has been upgraded from a previous Syrinx version, then the default policies already set on the hire categories (or overridden on specific fleet items) will be used to set the depreciation policy against each asset.  

If, however, hire categories and fleet items have been imported from spreadsheets without any depreciation information, then the default depreciation policies need to be set against each hire category, and the selected policy needs to be set against each existing asset within that category.  This is done using the ‘Set Default Depreciation Policies’ screen found in Syrinx SP Configuration\”Accounts/Invoicing”\Set Default Policies:

When you set the default policy against a category, you are selecting the policy that will be used when new items are added to the fleet (if a policy has not been picked explicitly).  The system will also set that policy against existing assets according to the ‘Update Existing Items’ setting at the bottom of the screen.  With the default ‘Yes If Blank’ setting, the system will only update existing assets if the policy has not already been set.  With the ‘Yes – All’ setting, all existing assets will be updated to reflect the selected policy. You should set a value against the “Update Existing Items” behaviour setting before setting depreciation policies against the categories in this screen

Note: Existing Items are only updated if they have yet to be depreciated through the new period end routine.

Configuration – Setting the Last Period Hire Valuation

Before you can run any new period end and produce your next hire valuation report, you must first run the ‘Set Last Period Hire Valuation’ utility in Syrinx Configuration\”Accounts/Invoicing”\Set Last Period Hire Valuation:

You use this utility to tell the system when was your last year end (that has been closed off) and which is the most recent period that has been closed off.    

The two periods may be the same period if you have recently closed off your year end and have yet to close off any subsequent periods.   

Before running the utility you must first press the ‘Asset Report’ button, to produce a print off of all the assets that were current after the given year end:

This report will highlight any items that have a cost amount set, but are missing either a depreciation policy or purchase date.  The items must be updated with the missing information before you can run the utility. If items are missing purchase prices, it will allow you to run the initial valuation but will inform you that these items will not be valued.  It will also highlight any missing or zero cost amounts.  

You should check carefully that all assets have the correct details before running the utility.  Note you cannot switch an existing asset from individual to bulk (or vice versa) once the item has been included in a period end valuation.

To enter any missing purchase dates or purchase prices, use the ‘Amend Hire Stock Items’ screen.  Any updates made here will update both the Hire Fleet Purchase details and the Asset Register with the new details.  To add missing depreciation policies, use the ‘Set Default Depreciation Policies’ screen (see above).

Note:  At this stage, the purchase date and price of assets can also be updated via the ‘Fixed Assets’ screen (see below).  Any changes to purchase prices made there will also be reflected on the ‘Amend Hire Stock Items’ screen.  Changes to an asset’s purchase date will not however be reflected on the hire fleet item, as Syrinx lets you depreciate an asset from a different date to the purchase date - for example if an item has been held as sales stock for a long period prior to adding it to the hire fleet.

To run the utility, press the OK button.  If there are items either without a cost defined or with a zero cost, then the system will warn you that these items will not be included in the valuation.  If these items are not to be included on the asset register and on the monthly valuation report, then they can be removed in bulk using the Syrinx SP\Accounts\Fixed Assets screen:

When you run the utility, the system will then calculate and store the depreciation and valuation at the given two points in time.   

Correcting System Generated Net Book Values

After running the initial valuation you have the option of correcting any of the system generated net book value figures held against the fixed asset records for cases where these values do not match figures taken from your previous depreciation methods.  This is accomplished by using the “Depreciation” option in Syrinx SP Configuration\Administration\Import Data. This import option can be used to update the purchase price, date, depreciation policy and total depreciation incurred by the asset up to the initial valuation point:

Note: This option can only be used directly after running the initial valuation and before running any further period ends in the main Syrinx program.

System Setup – Hire Categories

When entering a new hire category, you are prompted for the asset group that the category is to be reported within.  This will default to the first asset type defined (i.e. ‘Hire Fleet’).  

The Accounting tab of the Hire Category’s Show Detail screen can be used to set the default depreciation policy for new items that are added to the category, and lets you override the nominal codes used for posting the depreciation against each category:

Amend Hire Stock Items

When new hire fleet items are added, the system automatically adds the item to the Asset Register.  Changes to a new fleet item’s purchase price and purchase date will automatically update the corresponding asset record, up to the point when the next period end is performed.  Once the item has appeared on the next period end’s valuation (or has been incorporated into the initial valuation – see above) the purchase date/price cannot be amended on the stock record:

From that point on, any changes to the item’s purchase price/date must be made via the Fixed Asset Register (see below).   The Asset record for a given hire fleet item can be opened directly from the ‘Amend Hire Stock Items’ screen using the […] button next to the purchase date.

Fixed Assets

The Fixed Assets screen (on the Syrinx SP\Accounts menu) shows all the current assets – i.e. all individually numbered hire fleet items that are not disposed, or where there has yet to be a period end since the disposal:

The Amend button lets you view and amend the details of the selected asset.  The ‘Add Cost’ button lets you add additional capitalised expenditure to an item, and the Delete button lets you delete the asset permanently from the register.  The Find/Cat boxes let you filter the list.

As well as showing the asset number, name and purchase details, the list also shows the Net Book Value as at the last period end, plus the date disposed for those recently disposed items.

Fixed Assets – New Assets

When a new item is added to the hire fleet, it is added to the asset register automatically.   The Amend button lets you view and (if necessary) correct the details of a newly added asset:

As mentioned above, any changes to the purchase date/price on the Amend Hire Stock Items screen will automatically be changed here also.  Conversely, any change to the purchase cost on this screen will automatically update hire fleet item record (but changes to the date will not).

Fixed Assets – Depreciated Assets

When the next period end has been run, and the new asset has been depreciated, the Details tab will show the depreciation and net book value as at the last period end:

If you correct the purchase date or cost, then the depreciation at the next period end will include the depreciation for that month, plus any correction to the total depreciation resulting from the modified purchase details.  The correction will also be shown on an additional ‘Corrections’ tab:

Similarly, if you correct the depreciation policy, the next month’s depreciation will be adjusted so that the total depreciation to date reflects the new policy.  

Adding Additional Cost Items

The ‘Add Cost’ button on the Fixed Assets screen is used to add additional capital expenditure to the selected asset:

The additional cost is given an asset number comprising of the main asset’s number plus the given reference number as a suffix.  If the main asset is depreciated over straight line, then the policy of the additional cost will be set so that it is fully depreciated over the same period as the main asset:

Running the Period End

To run a period end, use the ‘Run Period End’ menu option on the SyrinxSP\Accounts menu:

After entering the period end date, the screen indicates if there any documents dated up to the period end date that may require review before closing the period.  The only items that will prevent you from running a period end are confirmed invoices dated prior to the period end that have not been posted to your accounts package. These should be posted to your accounts package before attempting to run the period end.  The system may also prevent users from confirming anything dated prior to the period end.  Users with the system privilege ‘Prv.Admin.Can Confirm In Previous Period’ can get around this restriction only if the contract, offhire, advice note, etc. that they are confirming will not initiate any stock transactions dated prior to the period end date as the system takes snapshots of bulk hire and sales stock quantities as part of the valuation process.

The next step is to review the new acquisitions and disposals of individually numbered fleet items (dated up to the period end date) that have been made since the last period end date:

The asset records may be reviewed and amended from here, as described above.  If an item has been disposed, then the Amend Asset Record screen has a Disposed tab that can be used to view the disposal details of an asset:

Once the asset register disposals and acquisitions have been reviewed, you can then run reports of the hire fleet disposals and acquisitions, which will also include any acquisitions and disposals of bulk fleet items dated after the previous period end up to this period end.

Note that all new individually numbered assets purchased up to the given period end date will be included in the period end, including any that were purchased in a previous period but were added to the system after the previous period was closed.

When the period end is run, if the option for posting depreciation is set, the system will create a set of summary posting entries, which will be posted to the accounts package when the accounts transfer is next run.

Note: You cannot reverse a period end once depreciation postings have been transferred to the accounts system.

Hire Fleet Valuation

After the period end has been run, the system automatically runs the Hire Stock Valuation for this period:

As well as the depreciation for that month (period) and lifetime, the report also shows the Y.T.D (year to date) depreciation.

Previous Period Ends

The ‘Previous Period Ends’ screen on the Syrinx SP\Accounts menu lets you view previous period ends, and lets you re-run the hire fleet valuation and acquisition / disposal reports for the selected period:

Fixed Assets – Changing Depreciation Policies

As noted earlier, there is a ‘Correct Policy’ button on an asset record that can be used to update the depreciation policy if it has been set incorrectly.  This would typically be used before the asset has been depreciated on its initial period end when reviewing the details of new acquisitions.  If the policy is corrected after it has been included on a period end, then the next month’s depreciation will be adjusted so that the total depreciation to date reflects the new policy.

There is also a ‘Change Policy’ button that can be used to change the current depreciation policy without applying an adjustment to the amount already depreciated:

For example, if an item with a cost value of £4,000 has already depreciated for three years using a four year straight line policy, it will have a current net book value of £1,000.  If the policy of the asset is then changed to straight line over 5 years, then the remaining £1,000 will be depreciated over a further 2 years.

Note: To enable this feature you must first tick the ‘Allow Depreciation Policy Changes’ system option on the Accounts tab of Syrinx SP Configuration\System Options\Accounts.

If the depreciation policy of an asset has been changed, the previous policy details are shown on the Policy Changes tab:

The current policy information at the top notes the remaining value to be depreciated, and the period it is to be depreciated over.  A policy change can be rolled back up to the point that the next period end is run.

Depreciation Values

The depreciation values on the Income tab of the Amend Hire Stock Items screen and on the hire utilization reports show the depreciation of the main item, plus any additional cost items that have been added to it.

Additional Configuration for Posting Depreciation to an Accounts Package

Setting the below options is only required if you intend to post the monthly depreciation figures to an accounts package.  If you do not intend to post depreciation costs to your accounts package, it will not be necessary to configure the below options.

Accounting System Nominal Codes

There are three nominal codes in the chart of accounts that are used for asset valuation and depreciation:

The Sage50 codes above are those from their sample database.  In practice, you can break these down into different areas (e.g. plant, tool, access) and departments (i.e. depots), as with sales & purchase nominal codes.

Configuration – System Options

On the Direct Transfer tab of Syrinx SP Configuration\System Options\Accounts there is a new drop-down option to indicate whether journals for depreciation are to be posted to the accounts system:

The option 'Minimum Net Book Value’ (previously on the Accounts tab) has been removed; residual values are now set against individual assets and default residual values can be set against each depreciation policy.

Note: The default setting for this option is “No”, you only need to amend this setting if you wish to post depreciation to your accounts package.  This functionality is not supported with all accounts packages that might link to Syrinx via a Transfer tool.  Enabling the option will only mark depreciation costs to be exported for any new hire valuations run in Syrinx and will not post the depreciation from any previous period ends that had been run.

Configuration – Nominal Codes

The Syrinx SP Configuration\Accounts\Nominal Codes screen now has two additional tabs ‘Balance Sheet’ and ‘P&L’ for defining the nominal codes used for posting depreciation:

Note: You only need to define these nominal codes if you intend to post depreciation to the accounts package.  If you do not intend to do this and only wish to generate valuation reports from within syrinx, you can leave these settings blank. 

Configuration – Accounts Setup / Fixed Asset Groups

The Fixed Asset Groups screen accessed via Syrinx SP Configuration\”Accounts/Invoicing”\Fixed Asset types lets you set up how you want the assets to be grouped on the fixed asset reports, and lets you set the nominal codes used to post the depreciation:

The Display Sequence is used to order the sections in the fixed asset reports.  

Each Hire Category is allocated to a Fixed Asset Group.  There will be three groups pre-defined – ‘Hire Fleet’, ‘Vehicles’ and ‘Other Assets’ in your Syrinx database, and each hire category will be allocated to an asset group according to whether the ‘Prevent From Hiring..?’ or ‘…only contains transportation vehicles’ flags have been set on the category.