Determining an asset's lifespan and depreciation involves categorizing or classifying it, a process known as asset management. Odoo's Accounting module streamlines asset management for long-term company assets. The Asset Management feature facilitates defining asset categories, configuring asset models, and computing depreciation. This functionality generates accounting entries for relevant depreciation at the end of a fiscal year. Efficiently managing company assets and tracking depreciation is crucial for maintaining accurate financial records.
In this blog, we will explore the powerful functionalities offered by Odoo 17 Accounting, providing comprehensive guidance on seamlessly managing assets while ensuring accurate depreciation calculations.
Configuring Assets in Odoo 17
Users can easily create or manage their company assets directly from the Odoo 17 Accounting module. Begin by navigating to the Assets option within the 'Accounting' menu. Upon accessing the dashboard, you will encounter a list of existing asset records, displaying their respective Asset Name, Acquisition Date, Original Value, Method, Book Value, Depreciable Value, and Status, as illustrated below.
Here, you can record and categorize various assets owned by your company by accessing a new asset configuration form.
Within the form fields, enter crucial information such as the asset name. Utilize the 'Asset' tab to configure asset values, depreciation method, current values, accounting, etc. Specify the product's original value, acquisition date, and asset model within the 'ASSET VALUES' section.
The not depreciable value and the book value of the asset can be set within the 'CURRENT VALUES' section.
Configuring Asset Model
Within the Asset configuration form, the 'Asset Model' field allows us to set or store various product model details. If model data is accessible, you can choose an existing model from the dropdown menu or create a new model. This field triggers another pop-up wizard where we can input the essential details for the new product model, as depicted below.
In the form view, the company name is automatically populated in the 'Company' field. Selecting a 'Method' for computing depreciation lines is essential, and the 'Duration' field specifies the depreciation period for an asset. The 'Computation' technique can be configured with settings for No Prorata, Constant Periods, and Based on days per period. While the 'Depreciation Account' is used to decrease the asset's value, the Fixed Asset Account documents the asset's acquisition and initial cost. A portion of the asset is recorded as an expense in the designated 'Expense Account.' Lastly, include the accounting entry journal in the 'Journal' section. Odoo 17 offers the capability to categorize assets into specific categories, facilitating streamlined management.
Depreciation Methods: Odoo 17 provides flexibility in selecting Depreciation Methods that match your company's accounting practices. Choose from options such as straight-line or declining balance methods, selecting the one that aligns best with your requirements. Customize depreciation calculations by defining parameters such as the number of periods and residual value.
Tab for Bills
The 'Bills' tab section allows for the addition of bill details related to the asset, including their Date, Account, Label, Debit, and Credit information. Click the 'Add a line' button to incorporate bill details from the journal items dashboard, as illustrated below.
Select the journal items and click the ‘Select’ button. Afterward, return to the asset configuration form.
Streamlining Depreciation Entries: Odoo 17 simplifies the depreciation process by automating journal entries. Once asset details and depreciation methods are configured, the system automatically generates entries. This automation reduces the likelihood of errors associated with manual data entry and saves time. After selecting the journal bills, you will find a ‘Modify Depreciation’ button, as depicted below.
Clicking on the ‘Modify Depreciation’ button will open another pop-up window where you can configure the depreciation settings. Choose the Action as Dispose, input the date in the corresponding box, and specify the account information for loss journal items in the Loss Account field to dispose of an asset. Internal remarks for adjusted depreciation are included in the Note field. Opting for the Pause option halts depreciation, and any modifications are displayed in the Depreciation Board tab.
When there is a need to dispose of an asset, Odoo 17 simplifies the entire process. Just designate the asset as 'Dispose,' and the system will automatically create the required accounting entries to accurately reflect the disposal. This ensures accurate financial reporting and compliance with accounting standards.
Upon disposing of the assets, you will receive an 'Asset' smart button, which allows access to the asset details.
To monitor a business's asset portfolio, Odoo 17 offers extensive reporting capabilities that provide detailed insights into asset depreciation, disposals, and current valuations. Due to its integrated approach, facilitating seamless collaboration between modules, the Assets module seamlessly integrates with Accounting and Inventory, ensuring a comprehensive overview of a business's financial health.