NetAsset - Reason Behind Clearing Accounts
Use Case: The purpose of this article is to explain the use of the different recommended clearing accounts in NetAsset.
Fixed Asset Proposal/Clearing Account
The Fixed Asset Proposal/Clearing Account is where new asset proposal transactions are recorded (via journal entry or vendor bill coding).
Vendor Bill/Journal Entry - when a vendor bill or journal entry is created for an asset, the following journal entry should be recorded:
Debit: Fixed Asset Proposal/Clearing Account
Credit: Cash
In-service entry: This balance will be in the clearing account until the asset is capitalized or built up. The resulting journal entry will reverse out the clearing account in the following entry:
Debit: Fixed Asset
Credit: Fixed Asset Proposal/Clearing Account
Construction in Progress Proposal/Clearing Account
The Construction in Progress Proposal/Clearing Account is where construction in progress amounts will be accumulated and aggregated during a construction project.
Vendor Bill/Journal Entry - when a vendor bill or journal entry is created for an asset, the following journal entry should be recorded:
Debit: CIP Proposal/Clearing Account
Credit: Cash
In-service entry: This balance will be in the clearing account until the asset is capitalized or built up. The resulting journal entry will reverse out the clearing account in the following entry:
Debit: Fixed Asset
Credit: CIP Proposal/Clearing Account
Go-Live Clearing Account
The Go-Live Clearing Account is where the net book balances will be recorded when go-live entries are created to establish mid-life balances in gross and accumulated depreciation. The prior period balances (not within Netgain NetAsset) are also cleared against this account.
Automatic System Entry - when the Go-Live Entries are run for the asset, the following journal entry will be recorded:
Debit: Fixed Asset
Credit: Accumulated Depreciation
Credit: Go-Live Clearing Account
Manual Entry - Depending on the previous accounting of the company, the following journal entry may include different accounts. The following entry is an example of what could be booked by the company to remove the asset information that has previously been recorded:
Debit: Accumulated Depreciation
Debit: Go-Live Clearing Account
Credit: Fixed Asset