How do I create a company unit record?

Summary

This article suggests two methods for keeping a record of a company unit and assumes you have the Unit Sales module.

You are advised to consult your accountant for advice on the preferred method to use and steps to follow.

More Information

• Method 1 assumes you wish to keep the value of company units as a fixed asset until it is sold or disposed of.
• Method 2 assumes you wish to include a company unit on your unit stock value until it is sold or disposed of.

Method 1 - a Fixed Asset

• Create a unit record for the company unit.
• The unit status should be set to 'COM - Company Unit'.
  • Click the drop down button on the "Status" field to select the above status or one already created for this purpose.
  • If the status does not exist click [Add].
  • Enter 'COM' as the code.
  • Enter 'Company Unit' as the description.
  • Select a "Background" colour for the status if you wish.
  • The flags on the [Settings] tab should all be set to 'No'.
  • Click [Done] and [Accept].
• Complete all relevant details including the purchase details.

As the unit status is not an In Stock status, there will be no nominal postings to bring the unit into stock.

• Click [Done] and [Accept] to save the unit record.
• Post the invoice onto the Purchase Ledger as usual.
  • Instead of coding the invoice to centre '200' for unit purchases, select a purchase centre for Fixed Asset purchases such as '614 - Motor Vehicle - Additions'.

Method 1 - Asset Disposal

Your unit will sit on your Balance Sheet as a Fixed Asset. When you choose to dispose of it follow the steps in this article. Alternatively you may choose to raise a Unit Sales invoice for the sale. Follow the below advice depending on the method you choose.

• If you choose to journal or raise a Sales Ledger invoice for the disposal (sale) of the unit, you should change the status of the unit to a suitable code such as 'COS - Company Unit Sold'.
  • Follow the steps, as described in the previous section, to create the new status with the same settings as per the 'COM' status.
  • You are also advised to manually update the [Sale] tab with the sale details and, on the [Features] tab, allocate the 'Message Exclusion' feature to the unit.
• If you choose to raise a Unit Sales invoice for the unit you should first change the unit status to your in stock status e.g. 'STO'.
  • This will create a Nominal Ledger posting for the cost of the unit which will Debit Unit Stock Value (Usually 70001) and Credit Unit Accruals (Usually Z940).
  • You should journal the cost of the unit from your Fixed Asset nominal centre to the Unit Accruals centre to contra this value. The unit is now included in your Unit Stock Value.
  • Raise the Unit Sales invoice which will post the sale and cost of the unit to the Profit & Loss.
  • If you have accounted for depreciation on the unit within your balance sheet you will need to journal this balance to Debit your Fixed Asset Depreciation centre and Credit the Unit Cost of Sale centre.

Seek advice from your accountant if you are unsure of the journals to post as they may advise you to follow a specific method for disposing of an asset.

Method 2 - a Stock Unit

• Create a unit record for the company unit.
• The unit status should be set to 'COM - Company Unit'.
  • Click the drop down button on the "Status" field to select the above status or one already created for this purpose.
  • If the status does not exist click [Add].
  • Enter 'COM' as the code.
  • Enter 'Company Unit' as the description.
  • Select a "Background" colour for the status if you wish.
  • On the [Settings] tab set the "In Stock" flag to 'Yes'.
  • Click [Done] and [Accept].
• Complete all relevant details including the purchase details.

As the unit status is an In Stock status, there will be an immediate nominal posting to bring the unit into stock i.e. Debit Unit Stock Value (Usually 70001) and Credit Unit Accruals (Usually Z940).

• Click [Done] and [Accept] to save the unit record.
• Post the invoice onto the Purchase Ledger as usual.
  • Code the invoice to centre '200' for unit purchases.

Method 2 - Asset Disposal

Your unit will sit on your Balance Sheet as part of your Unit Stock.

• Raise a Unit Sales invoice for the unit which will post the sale and cost of the unit to the Profit & Loss.
  • If you have accounted for depreciation on the unit within your balance sheet you will need to journal this balance to Debit your Fixed Asset Depreciation centre and Credit the Unit Cost of Sale centre.

Seek advice from your accountant if you are unsure of the journals to post as they may advise you to follow a specific method for disposing of an asset.

See also

• How do I deal with fixed asset disposals?
• How do I create a sales or purchase centre?
• How do I create a nominal code?
• Creating a new unit
• Creating a used unit

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Keywords AND Misspellings

company vehicle, asset, company car, disposal, sell, depreciation

Tags

GR53