Understanding Composite Asset Processing Concept Understanding Composite Asset

Understanding Composite Asset Processing Concept

Understanding Composite Asset Processing

Understanding Composite Asset Processing Step 1 Composite asset processing is a way of grouping multiple assets so that their total cost is carried by and depreciated as a single asset. The single asset is termed a composite asset, and associated assets are known as composite members.

Understanding Composite Asset Processing Step 2 In composite processing, the transaction details are rolled up to the composite asset level. After the rollup occurs, composite members do not retain transaction details. Because the depreciation occurs at the composite asset level, only the composite asset carries information such as book, depreciation method, prorate convention, or asset life.

Understanding Composite Asset Processing Step 3 The composite asset contains its own cost information and for the associated composite members. Therefore, it is a financial asset. However, no individual detail is retained once the total cost is rolled up. Composite member assets are nonfinancial assets and contain no cost information. They contain acquisition details that are summed up and capitalized at the composite asset level.

Understanding Composite Asset Processing Step 4 You can add a composite asset by using the General Information page. The process of adding a composite asset involves three steps as displayed on the screen.

Understanding Composite Asset Processing Step 5 You have learned about composite asset processing in People. Soft Asset Management. End of Procedure.