Acquire to Dispose: manage fixed assets through retirement

Use this workflow to keep the capital decision, physical asset, fixed-asset register, and accounting entries traceable from acquisition through retirement. The asset register supports accounting review; it does not replace physical custody controls.

Where this workflow fits

This workflow suits asset-intensive organizations, manufacturers, distributors, and multi-entity firms that need a controlled fixed-asset register. An approved capital need leads to purchasing and asset registration. Periodic amortization and disposal results feed financial close.

Featured capabilities

• Fixed Assets & Amortization: Maintain the register and review amortization.
• Purchasing & Accounts Payable: Verify purchasing documents and supplier bills.
• Accounting & General Ledger: Review posted asset or period accounting.
• Budgets & Cost Centers: Establish the approved plan and budget comparison.

People and preparation

The budget owner and finance need an approved capital need, capitalization policy, period, asset and accumulated amortization accounts, useful-life decision, and acquisition evidence. Assign responsibility for physical custody.

Process areas and stages

1. Authorize the investment

   Owner: Budget owner and finance. Input: Capital need and budget.

   Work and decision: Confirm that the capital need, budget, accounting period, and approval are consistent with the organization's asset policy. Identify the asset, contra-asset, and amortization expense accounts before creating the record. Decide whether the purchase qualifies under company policy and which entity, period, and GL accounts apply. Obtain the appropriate approval before committing to the supplier.

   Evidence and handoff: Approved purchase and accounting basis pass to acquisition.

2. Acquire and document

   Owner: Purchasing and accounts payable. Input: Approved purchase.

   Work and decision: Complete the approved purchase and supplier-bill process. Retain the purchase and accounting documentation needed to establish the asset's acquisition details. Place the order, confirm delivery and condition, and process the supplier bill. Keep invoice and acquisition information needed to support the recorded asset value.

   Evidence and handoff: Purchase, receipt where applicable, and bill support registration.

3. Register the asset

   Owner: Finance and asset custodian. Input: Acquisition evidence and physical asset.

   Work and decision: Create the fixed asset and record its name, tracking reference, acquisition information, accounting accounts, and any required dimensions or custom fields. Complete outstanding acquisition information when it becomes available. Create the asset record with identifying reference, acquisition details, accounts, and required dimensions. Record who has the asset and resolve missing cost or date details before amortization review.

   Evidence and handoff: Fixed-asset register links the physical item to its accounting basis.

4. Review periodic amortization

   Owner: Finance. Input: Asset register and accounting period.

   Work and decision: Review the fixed asset register and related GL activity. Run amortization for the selected accounting period, review eligible assets and calculated amounts, then review the generated GL transactions. Review eligible assets and calculated amortization, then inspect generated GL transactions. Investigate missing, duplicate, or unexpected amounts before finalizing the period.

   Evidence and handoff: Reviewed register and GL activity hand off to financial close.

5. Retire or dispose

   Owner: Asset custodian and finance. Input: Approved retirement or sale.

   Work and decision: When the asset is retired or disposed, use the asset record and related GL transactions to confirm its book value, accumulated amortization, and disposal status. Handle corrections through the approved accounting process rather than making unsafe direct edits to posted asset history. Verify the physical asset’s disposition and current book value and accumulated amortization. Apply the approved disposal accounting and review resulting GL entries; corrections follow the accounting process.

   Evidence and handoff: Asset disposal state, supporting evidence, and finance review complete its lifecycle.

Variations and exceptions

A lost, damaged, or sold asset needs an authorized physical and accounting disposition. Do not erase posted asset history to make the register appear current.

Completion and review

The asset register identifies the asset, its accounting accounts, acquisition support, amortization activity, and current disposal state. Related GL activity is available for finance review.

Related workflows

• Record to Report and Budget to Actual
• Month-End Financial Close