You have a fixed asset with a non-zero book balance and you would like to convert the fixed asset into an inventoried product. Here are the steps to do it.
1 You will need to first dispose of the fixed asset, you will do the disposal by first going to the General Ledger menu, Fixed Asset, List. Find the fixed asset and there is a dispose link for each fixed asset. Click on dispose to write off the fixed asset. Use a date that is after the last GL transaction date for the fixed asset. If you have recorded any amortization, make sure you date the disposal after the last amortization. You will be asked to enter a price which is the value of the fixed asset being disposed. This must match the book value of the fixed asset (initial purchase cost minus amortized cost). You will also need to choose a debit account to deposit the disposal value into. You can create a clearing asset which will temporarily hold the value of the fixed asset before we move it to an inventoried product. Let's call this asset account "Clearing For Fixed Asset Transfer". Click on Post Asset Disposal to complete the disposal. After this is posted, your book value of the fixed asset is zero and the entire book value is transferred to the Clearing For Fixed Asset Transfer GL account
2 Create the inventoried product to hold the new value. The product will have a quantity on hand of zero and an inventory value of zero. Go to the Products menu, New Adjustment under Inventory Tools. Choose the new product to adjust and then click on New Inventory. Enter quantity of 1 and per unit value matching the book value of the disposed fixed asset. For the Inventory Value Adjustment GL Account, choose Clearing For Fixed Asset Transfer.
Click on Post Adjustment to finish the adjustment.
By the end of this process, you have disposed of the fixed asset and then move its book value to a new inventory product.