Asset Value Adjustment
Overview
Asset Value Adjustment – Business Overview
Asset Value Adjustment is used to officially change the recorded value of a company’s fixed assets in Dafater. It ensures that asset values shown in financial reports reflect their true economic value based on revaluation, impairment, correction of errors, or business events affecting asset worth.
This document plays a key role in keeping asset records accurate, compliant, and aligned with financial and management reporting needs.
What Asset Value Adjustment Is Used For
Asset Value Adjustment is used when the book value of an asset needs to be increased or decreased without disposing of the asset. Common purposes include:
- Revaluing assets based on market value or professional appraisal
- Recording impairment or permanent reduction in asset value
- Correcting asset valuation errors made during acquisition or capitalization
- Aligning asset values with regulatory, audit, or internal policy requirements
It allows businesses to maintain accurate asset balances without disrupting ongoing asset usage.
Prerequisites Before Using Asset Value Adjustment
Before creating an Asset Value Adjustment, the following should be in place:
- Assets must already be created and active in Dafater
- Assets should have an existing book value and ownership status
- Proper accounting periods must be open
- Internal approvals or valuation reports (if required by company policy) should be available
- Users should understand the reason and financial impact of the adjustment
Clear documentation and justification are essential before proceeding.
Typical Workflow and Business Process Fit
Identify the Need for Adjustment
The finance or asset management team identifies a difference between current asset value and its fair or correct value.Review Supporting Information
Appraisals, audit findings, management decisions, or error reviews support the adjustment.Create Asset Value Adjustment
The document is prepared with the revised value and justification.Approval and Posting
Once approved, the adjusted value becomes the new book value of the asset.Financial Impact Reflected
Financial statements and asset reports automatically reflect the updated asset value.
This process ensures asset records remain accurate and auditable over time.
Key Business Scenarios Where Asset Value Adjustment Is Essential
- Revaluation of property, buildings, or land due to market changes
- Recognition of impairment for damaged or obsolete equipment
- Adjustments following internal or external audits
- Correction of incorrect capitalization amounts
- Compliance with accounting standards or regulatory reporting
In all these cases, Asset Value Adjustment ensures financial accuracy without removing or replacing the asset.
Important Considerations for Users
- Asset Value Adjustment impacts financial statements and should be used carefully
- Adjustments should be supported by valid business reasons and documentation
- Frequent or unjustified adjustments may raise audit concerns
- Users should confirm the timing of adjustments aligns with reporting periods
- Once posted, adjustments affect future depreciation and asset reporting
Asset Value Adjustment is a powerful tool and should be handled with appropriate review and approval controls.
In summary, Asset Value Adjustment enables businesses to keep asset values realistic, compliant, and transparent, supporting better financial reporting and informed decision-making within Dafater.
Basic Information
- Module: Assets
- Document Type: Other
Fields
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| company | Company | Link | Company | Company within Dafater where the asset value adjustment is recorded | |
| asset | Asset | Link | ✓ | Asset | Specific asset whose book value is being adjusted |
| asset_category | Asset Category | Read Only | - | Category of the selected asset for classification purposes | |
| date | Date | Date | ✓ | - | Effective date of the asset value adjustment |
| finance_book | Finance Book | Link | Finance Book | Finance book under Dafater used for asset valuation | |
| amended_from | Amended From | Link | Asset Value Adjustment | Reference to the previous asset value adjustment record | |
| currentassetvalue | Current Asset Value | Currency | ✓ | - | Existing book value of the asset before adjustment |
| newassetvalue | New Asset Value | Currency | ✓ | - | Revised asset value after applying the adjustment |
| difference_amount | Difference Amount | Currency | - | Calculated difference between current and new asset values | |
| difference_account | Difference Account | Link | ✓ | Account | Account used to record the value difference in Dafater |
| journal_entry | Journal Entry | Link | Journal Entry | Linked journal entry created for the asset value adjustment | |
| cost_center | Cost Center | Link | Cost Center | Cost center associated with the asset value difference |
Permissions
| Role | Read | Write | Create | Delete | Submit | Cancel |
|---|---|---|---|---|---|---|
| Accounts User | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Accounts Manager | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| System Manager | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Related DocTypes
| DocType | Relationship | Module |
|---|---|---|
| Account | Links to | Accounts |
| Asset | Links to | Assets |
| Asset Value Adjustment | Links to | Assets |
| Company | Links to | Setup |
| Cost Center | Links to | Accounts |
| Finance Book | Links to | Accounts |
| Journal Entry | Links to | Accounts |