How to cancel or reverse fixed asset entries in Microsoft Dynamics NAV 4.0

How to cancel fixed asset entries

You must use the Cancel FA Ledger Entries batch job to remove fixed asset ledger entries from the FA Ledger Entries window. To run the Cancel FA Leger Entries batch job, use one of the following methods, depending on the type of fixed assets.

Method 1: Cancel a single fixed asset entry

To cancel a single fixed asset entry, follow these steps:

1. On the Financial Management menu, click Fixed Asset two times.
2. In the Fixed Asset Card dialog box, press F5 to locate the required asset number. Then, click OK.
3. In the Fixed Asset Card dialog box, click Depr. Book, and then click Ledger Entries.
4. In the FA Ledger Entries dialog box, select the fixed asset entry that you want to cancel.
5. Click Functions, click Cancel Entries, and then click OK to cancel the fixed asset ledger entries.

Method 2: Cancel multiple fixed asset entries

To cancel multiple fixed asset entries, follow these steps:

1. On the Financial Management menu, click Fixed Asset, click Setup, and then click Depreciation Books.
2. In the Depreciation Book Card dialog box, press F5 to locate the required depreciation book code. Then, click OK.
3. In the Depreciation Book Card dialog box, click Functions, and then click Cancel FA Ledger Entries.
4. In the Batch Job Request window, specify the conditions for the batch job, and then click OK to start the batch job.

The batch job transfers the fixed asset ledger entries that are canceled to a journal. If the fixed assets that are included in the batch job are integrated together with the general ledger, the batch job transfers the canceled lines to the FA G/L journal. If these fixed assets are not integrated together with the general ledger, the batch job transfers the canceled lines to the FA journal.

If it is necessary, you can adjust the journal entries before you post the journal entries. The fixed asset ledger entries are removed from the FA Ledger Entries window. And, the fixed asset ledger entries are posted to the FA Error Ledger Entries window. If you cancel incorrect fixed asset ledger entries, the statistics windows and the reports display accurate amounts for the fixed assets.

Method 3: Cancel the disposal entries in the FA Asset Card window

If the Depreciation Book card is set up to integrate together with the general ledger, you may have to cancel the disposal entries in the FA Asset Card window. To do this, follow these steps:

1. Make sure that the Allow Correction of Disposal check box is selected. To do this follow these steps:
   1. On the Financial Management menu, click Fixed Assets, click Setup, and then click Depreciation Books.
   2. In the Depreciation Book Card dialog box, press F5, locate the required depreciation book code. Then, click OK.
   3. In the Depreciation Book Card dialog box, make sure that the Allow Correction of Disposal check box is selected.
2. Cancel the disposal entries. To do this, follow these steps:
   1. On the Financial Management menu, click Fixed Assets two times.
   2. In the Fixed Asset Card dialog box, press F5 to locate the required asset number. Then, click OK.
   3. In the Fixed Asset Card dialog box, click Depr. Book, and then click Ledger Entries.
   4. In the FA Ledger Entries dialog box, click the fixed asset entry line that you want to correct.
      
      Note If you select an entry that has an FA Posting type of Proceeds in Disposal, you will receive an error message that resembles the following error message:
      Entry No. entry_no cannot be canceled. Use FA Posting Type= Proceeds on Disposal.
   5. Click Functions, and then click Cancel Entries.
   6. On the Options tab, enter a different date in the Posting Date field if it is necessary, and then click OK. If you do not enter a date in the Posting Date field, Microsoft Dynamics NAV uses the original disposal posting date.
      
      Note After the disposal entry is posted, the entry is transferred to the journal. If the depreciation book is not integrated together with the general ledger, the entry is transferred to the FA journal . If the depreciation book is integrated together with the general ledger, the entry is transferred to the FA G/L journal.
   7. Note In this step and in the following steps, the FA G/L journal is used as an example.
      
      Make sure that the following information is correct in the FA G/L journal:
      • The Posting Date field displays the date of the original disposal posting.
      • The
        Account Type field is set to Fixed Asset.
      • The Account No. field displays the account number of the fixed asset.
      • The Depreciation Book field displays the book that is assigned to the asset.
      • The
        FA Posting Type field is set to Disposal.
      • The Amount field displays the original disposal amount that has a positive value.
      • The Bal. Account Type field is set to G/L Account.
      • The Bal. Account No. field displays the account number of the original disposal posting.
        
        Note The FA Error Entry No. field is automatically populated by using the fixed asset entry number of the original Proceeds on Disposal posting type. Therefore, the new entries that are posted in the FA G/L journal appear as error ledger entries in the FA Error Ledger Entries window in the depreciation book. To mark these entries as error entries in the FA G/L journal, the value of the following fields must be identical to the corresponding values in the FA G/L journal. Additionally, the amount on the journal line must be the same as the amount in the fixed asset ledger entry, except the amount on the journal line must have the opposite sign:
        • FA posting date
        • FA posting type on the journal
        • FA ledger entry
   8. Click Posting, and then click Post. When you receive the following message, click Yes:
      Do you want to post the journal lines?

Result of canceling the fixed asset entries

The fixed assets book value is increased. The value is equal to the original amount that was available before the disposal. All the lines for the asset are eliminated from the depreciation book in the fixed asset ledger entries. However, these lines are in the error ledger entries. Therefore, you have a record of the lines that are canceled.

How to reverse fixed asset entries

Microsoft Dynamics NAV cannot reverse the fixed asset entries if the following conditions are true:

• The fixed assets are sold.
• The reversal displays a negative book value.
• The fixed asset entries do not originate from a G/L journal.

To reverse a fixed asset entry, use one of the following methods.

Method 1

1. On the Financial Management menu, click Fixed Asset two times.
2. In the Fixed Asset Card dialog box, press F5 to locate the required asset number. Then, click OK.
3. In the Fixed Asset Card dialog box, click Depr. Book, and then click Ledger Entries.
4. In the FA Ledger Entries dialog box, select the fixed asset entry that you want to reverse.
5. Click Functions, and then click Reverse Transaction.
6. In the Reverse Transaction Entries dialog box, click Reversing, and then click Reverse. When you receive the following message, click Yes:
   To reverse the entries, the program will post correcting entries. Do you want to reverse the entries?
7. To verify that the reverse transaction is completed, follow these steps:
   1. On the Financial Management menu, click Fixed Asset two times.
   2. In the Fixed Asset Card dialog box, press F5 to locate the required asset number. Then, click OK.
   3. In the Fixed Asset Card dialog box, click Fixed Asset, and then click Ledger Entries.
   4. Verify the following specifications:
      • The Reversed check box is selected if the entry is reversed.
      • The Reversed by Entry No. field contains the number of the correcting entry.
        
        Note If the Reversed by Entry No. field and the Reversed Entry No. field contain a value, the entry cannot be reversed again.

Method 2

1. On the General Ledger menu, click History, and then click Registers.
2. In the G/L Registers window, select the fixed asset entry that you want to reverse.
3. Click Functions, and then click Reverse Register.
4. In the Reverse Register Entries dialog box, click Reversing, and then click Reverse. When you receive the following message, click Yes:
   To reverse the entries, the program will post correcting entries. Do you want to reverse the entries?

The difference between the cancel entries process and the reverse entries process is that the cancel entries process moves the incorrect entry from the FA Ledger Entry journal to the FA Error Ledger Entry journal. However, the reverse entries process creates an entry in the FA Ledger Entry journal that reverses the transaction.

Microsoft Dynamics NAV uses the FA Posting Date field for various fixed asset computations. Therefore, the incorrect entries from the FA Ledger Entries table must be removed. Additionally, the reverse entries process does not reset the Last Depreciation Date field in the FA Depreciation Book table before reversal. Therefore, you cannot run the depreciation process again for a date if the reverse entries are selected.

Therefore, we recommended that you use the cancel entries process instead of the reverse entries process to correct the fixed asses ledger entries to calculate the depreciation amount.