06 - Dealing With Assets

 

An appointee of a job needs to report to ASIC the value of Assets available for realisation and the amounts received in realising those Assets. These figures are reported on various statutory returns such as ASIC form 5602.

This module will demonstrate how to maintain and realise those assets.

In realising Assets, you will discover that multiple Assets may be realised as part of one asset sale.

We will look at this event in a sale of business scenario and allocate costs to the sale.

At the completion of this module you will be able to do the following:-

• Realise Assets
• Revalue Assets
• Part-realise Assets
• Write-off Assets
• Payout charged Assets
• Disclaim Assets
• Product Asset Reports

Maintaining Assets

To change the value of an Asset, adjust the value of the ERV (low)in the Assets Details form. This will create an entry in the relevant Asset Holding Account.

• In the Job window, click Financials -> Assets:

• Double-click the Asset you want to revalue. in this example, we will choose Plant and Equipment.
• Select the Asset from the list, we will look at Truck, Hino 2015

• The Asset capture window appears. Edit the Asst Value, in this example, we will reduce Actual ERV (Low) to $20,000, click Save and Exit. For any adjustment made on the asset, I?NS?OL will prompt the user to select the effective date for the adjustment. enter the date and click OK.

Note: Any changes made in assets value will be reflected in the Equity accout "Revaluation & Disposals"

                      ======================================

Realising Assets

Realising Assets is handled through the Asset Register.

The basic process is:

• Open the Asset Register
• Add assets to the Asset class list
• Creation of an Accounts Receivable Entry (or Cash sale)
• Receive payment

- Open the Asset Summary list by clicking Financials > Assets (refer to the first screenshot)

- Open the Assets registry by selecting the required asset class, in this example" Plant & Equipment" then     select Truck Hino

Click Realise Now to start the realistation process.

A Credit Sale screen will pop, up with Asset Realisation tab selected.  

Note:  When entering an Asset realisation, double-check that you are entering a Creditor or Cash Sale.

           Entering a Credit Sale will generate an Accounts Receivable that you will then need to receive into your Cash at Bank later.

            If you want the Asset Realisation to hit your Cash at Bank, then you need to enter a Cash Sale.

           Also, when you enter the Customer name, they need to be one of your added counterparties.

- Enter the total sale amount in the transaction line. Tick part sale if there will be a further realisation on this asset. An explanation of part sales is in notes at the end of this chapter.

- If there are no costs involved with the sale of the asset, you can save and Exit

- If there are costs involved in the sale e.g. Agent’s Fees, Advertising, then click on the Accounts tab and follow the steps below.

Realising Assets with Costs

Sometimes, you might have a cost associated with realising an asst. To record these costs, follow the steps above, then do the following:-

- Select the Accounts Tab

- Realisation Costs are entered as negative amounts.

- Apply the allocation of the cost to the asset. then lick Save and Exit 

The Asset Sale is now completed. Amounts Realised are updated in the Asset Details. The Asset’s ERV low will be increased to the amount realised if the amount realised is greater than the ERV Low.

Note: Auto allocating amount in Sale of Asset.

If all assets are sold as a group for one amount (eg. Sale of business scenario). You can Pro-Rate costs over all the assets equally by using the Auto Allocation Function

Notes on Asset Realisations

The following commentary describes some of the operations pertaining to Asset Management. No specific examples are illustrated

Part Asset Sales

Marking an asset as a Part Sale ensures it is still available for realisation. Assets marked as Partly Realised may be included in future Asset Sales.

An example of an Asset that may be partly realised includes Stock, where you may progressively realise the Asset over a period of time. In this instance enter an Asset Sale for each transaction.

If an Asset is Partly Realised, the ERV (Low) will be increased if it is less than the amount realised.

Writing off Assets

To Write Off an Asset simply adjust the Value of the ERV (Low) in the Asset details form to nil.

 

Credit Notes

In a case where a debtor requires a credit note issued (prior to paying a debt), you may issue a Credit Note by navigating to:- Transactions > Accounts Receivable > New Credit Note

A Credit Note appears as part of the balance owing by a debtor, however, it doesn’t adjust the value of the existing debtor as an asset.

If an asset is unrealised (in this case the original debtor) it will not affect the system's operation.

Asset Transactions

On the Asset form, you may view all transaction entries that are created for an asset realisation. As follows

• Open Asset Register
• Click the asset to open the asset capture form
• Click on the realised or the costs ellipsis
• The account register will display the asset transactions

Charged Assets

Disclaiming Charged Assets

Generally, the Appointee disclaims a liability where there is a net deficit in the asset equity or the ongoing commitment to a liability exceeds the net equity achievable from realisation.

In the following example, we will go through the steps of how to disclaim an Asset.

 

Paying out charged Assets

If there is sufficient equity in the asset (i.e. if the net estimated realisable value of an asset exceeds the amount owing on the charge) the Appointee may decide to payout the charge. In this case, the asset would become available for realisation.

Disclaiming and Retaining Assets subject to fixed charges.

Retaining Assets

• Double click on Assets subject to specific Security Interests
• Click on Payout/ Discaim button  to get to the charge information form
• Tick the retain box, enter the payout amount, and click Save
• The confirm Payout form will pop up, click Ok 

• Once you have retained the asset, two things will happen:

 1- An accounts payable is now created so you can pay out the secured Creditors

 2- The asset is ready to be realised. 

Disclaiming Assets

Once you have disclaimed the asset, you will notice that you can't realise the assets and the asset will be crossed in the Assets Register 

Entering an arrangement with a Charge Holder

In the above example, using the Disclaim / Payout functions illustrates how most arrangements may be correctly entered into the system by using a combination of:

• Entering the appropriate Amount Owing and Asset Values to ensure the resultant claims match the arrangements made with the charge holder.
• Entering a payout amount.
• Specifically entering the amount of the Proof of Debt and Amount Admitted to participate in a creditors distribution.

Subject to a controller’s obligations, the following may result from Charge Holder arrangements:

• Creation of a Secured Creditor
• Creation of an Unsecured Creditor Claim
• Creation of an Accounts Payable Entry

Undo Disclaim / Payout

To undo a Payout or Disclaim, right-hand click on the asset listed and select Undo Disclaim/Payout: