Fixed Asset by Value incorrectly reports Acquisition Cost as Opening Value

The report incorrectly shows shows Acquisition Cost and Accumulated Depreciation as Opening Balance instead of under Acquisition Cost.

Illustrate with screenshots. Show the Edit screen for the report. Depending on your report definition, this could be correct.

You can see that the Balance Sheet is correct.

You entered starting balances for the Fixed Asset which following the guides Purchase fixed assets | Manager is meant for:

  • Starting balance fields appear for Acquisition cost and Accumulated depreciation. These are used only when making a transition to Manager from a prior accounting system.

And they constitute and correctly display as an Opening Balance. Normal use is to purchase fixed assets and these will show in the Acquisition column as they would be purchased as part of your current accounting system.

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Acquisition Cost is what you paid for the asset originally, possibly years before. Accumulated Depreciation is the sum of depreciation from then until the Balance Sheet report date.
Opening Balance is the Book Value of the Asset at the beginning of the accounting period.

Starting Balance and Acquisition are only the same when the asset is purchase during the reporting period.

The reporting as detailed offends Australian Accounting Standards and misrepresents the value of the business in the Statement of Financial Position.

I made a mistake. The Assets Value reports correctly in the Statement of Financial Position.

If you acquired the asset 0n 01/05/2023 then the acquisition cost and accumulated depreciation should be zero

You should have a purchase invoice, or similar, to justify the cost of purchase

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Also, under Australian Taxation Law, opening balance is the Acquisition Cost less the Accumulated Depreciation at the time of reporting.

@Tigadad also here you miss the point. If you would never have transferred an old account to the one you use currently in Manager than you would have made a transaction (payment) to buy the fixed asset which is recorded correctly under acquisition cost.

Only in case you inherit from a prior accounting system should you enter a starting balance (read guides at Enter starting balances | Manager ) which will show as opening balance in the fixed asset report.

Starting balances are used only when migrating accounting for an entity to Manager from a prior accounting system. They can be set only for balance sheet accounts or, when appropriate, for their subsidiary ledgers. (See information below.) They are not used for new businesses just beginning operation. Starting balances on the date you begin using Manager should equal ending balances for equivalent accounts in the old accounting system.
The real payment happened in the past under the other accounting system. The amount you enter in this starting balance would be the value of the inventory item at the state of using them in Manager and does nor reflect the original acquisition cost of years ago as you did not record that acquisition as payment in your current accounting system and therefore it is referred to as opening balance.

Assume some years ago you used Accounting software “X”. You would have purchased an asset for 25,000 and depreciated it with 2,000 at the end of the year. You decided to move your accounting to Manager, but did not want to recreate all historical accounts including the acquisition of your old asset. At this stage the new value of that already acquired asset is 25,000-2,000=23,000 and you would enter that as starting balance in Manager. Auditors will have to still get records of your old system in such case if needed to know the original acquisition cost. This opening balance explains that there was a value before starting the accounting in Manager.

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I understand what you are saying but under Australian Taxation law that is incorrect.

The developer @Lubos and his company is Australian. I leave it to him to further reply as I think all the answers were clear, especially regarding the use of starting balances.

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Thanks @eko, I understand what you are explaining. I just point out that this is a serious programming design error that makes this truly wonderful program pretty much useless.

Which is what Manager does.

To see it more clearly create a balance sheet control account for the asset classes

  • Acquisition Cost
  • Accumulated Depreciation

Manager will then show the sum of these which is there book value.

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I’m sorry to say this, @Tigadad, but you are just plain wrong. As with another recent thread, you continue to misinterpret clear explanations in the Guides. Many, many Australians successfully use the software in full compliance with Australian tax laws.

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Thanks @tut. The Fixed Asset Summary is just plain and simple wrong.

Opening Balance is the Book Value at the end of the last reporting period / start of the new reporting period. It has no Accumulated Depreciation. The opening balance is the figure used to calculate Depreciation over the current period. I have not completed a full accounting period yet, but from what I can glean from the Guides it appears that the Acquisition Cost will be lost when replaced by next periods Opening Balance ???

Acquisition Cost is the Original Cost when first purchased, perhaps years ago and hence you need the Acquisition Date to know when, as you need this to complete the tax return and for calculating Base Cost of a GST event. I think you pointed out that the Acquisition date is used to calculate the depreciation for the partial period and I don’t have a problem with that.

In the case of converting from another accounting system to Manager it is most simple to do it at the start of a new accounting period (new FY). At this point the Acquisition Cost minus Accumulated Depreciation equals Opening Cost, which is what manager uses to do the depreciation calculation. I understand that. This also means that you have to run multiple Depreciation Calculations when you purchase multiple assets during the reporting period; I see that. The problem is that without an Acquisition Date you have to try and remember when the item was purchased or tediously troll through transactions to find it. When you have 26 Divisions, 14 Locations, 1500 Assets, 1000 transactions per month spread across 12 associated trusts, partnerships and distributions that idea becomes nonsense.

The report itself is factually incorrect, even though behind the scenes Manager makes it work. The purpose of the report is to report the value of the business to the owners but it does not.

As to my misrepresenting the explanations in the Guide I can only say that they are difficult to understand because they are too brief and use terminology peculiar to Manager. This is compounded by the non-standard interpretation of Australian Accounting Standards. It would not be a problem if the Guides were more complete.

You are correct Manger starts depreciation from the time and asset is purchased not when it is in service. It would be better if it allowed for this but typically the financial difference is small so may not be worth the accounting effort in many cases.

Why not just add the date to the description field when setting up the asset?
This was accepted by an ATO auditor.

Thansk @VACUUMDOG, that’s what I have done to preserve the information but you can’t search on the date. I have since created a Custom Field to capture the data. I just need to find out how to access it.

You can search by date

@Patch, I can’t disagree with your comment but the reports are not just an accounting report, they are a report to the business owners.