Managing Fixed Assets (FA) is critical for organizations to keep track of their long-term investments, such as machinery, vehicles, office equipment, and buildings. In Dynamics 365 Business Central, the Fixed Assets module allows you to:
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Register and categorize fixed assets
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Automate depreciation and acquisition posting
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Track maintenance and insurance
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Ensure compliance with accounting and tax requirements
This guide walks through the key concepts, setup, posting, and best practices for Fixed Assets in Business Central.
🔹 What Are Fixed Assets?
Fixed Assets are long-term resources owned by a business that are used in operations but not intended for resale. Examples include:
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Tangible assets → machinery, vehicles, furniture, IT equipment, buildings
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Intangible assets → patents, licenses, software
They need to be tracked not only for financial reporting but also for operational and compliance reasons (e.g., depreciation, insurance, and maintenance).
🔹 Fixed Asset Lifecycle in Business Central
The lifecycle of a fixed asset in Business Central typically follows these stages:
| Stage | Description | Example |
|---|---|---|
| Acquisition | Purchase or creation of the asset | Buying a new company car |
| Depreciation | Periodic expense allocation | Monthly depreciation of the car |
| Revaluation | Adjusting the asset’s value | Increasing value of real estate |
| Maintenance | Costs related to upkeep | Repairing office equipment |
| Disposal | Sale, scrapping, or retirement | Selling old laptops |
🔹 Fixed Asset Setup
Before you can start using Fixed Assets, you need to configure several elements:
1. Fixed Asset Cards
Each asset gets its own Fixed Asset Card, containing details like:
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Asset number and description
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FA Class and FA Subclass
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Posting groups
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Depreciation book assignment
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Location, responsible employee
2. FA Classes and Subclasses
These help categorize and group assets for reporting and control.
| Level | Purpose | Example |
|---|---|---|
| FA Class | Broad grouping | VEHICLES, BUILDINGS, MACHINERY |
| FA Subclass | More detailed grouping | Cars, Trucks, Delivery Vans |
3. FA Posting Groups
FA Posting Groups map asset transactions to the correct G/L accounts. They determine where acquisition costs, accumulated depreciation, gains/losses, and disposals are posted.
4. Depreciation Books
Depreciation Books define how depreciation is calculated and posted. You can set up multiple books for different purposes (e.g., one for accounting, one for tax).
| Field | Purpose | Example |
|---|---|---|
| Depreciation Method | How depreciation is calculated | Straight-line, Declining Balance |
| Depreciation Starting Date | When depreciation begins | 01-Jan-2025 |
| Depreciation Period | Frequency of depreciation | Monthly |
| Integration | Whether postings go to G/L | Yes (for main book), No (for tax book) |
🔹 Transactions in Fixed Assets
Business Central supports several transaction types for Fixed Assets:
| Transaction | Purpose | Example |
|---|---|---|
| Acquisition | Record purchase cost | Buying office desks |
| Depreciation | Allocate expense over time | Monthly depreciation on machinery |
| Revaluation | Adjust book value | Updating value of land |
| Write-Down | Reduce value due to impairment | Damaged equipment |
| Appreciation | Increase value (rare, but possible) | Artwork value increase |
| Disposal | Sale, scrapping, or transfer | Selling a used company car |
🔹 Depreciation Methods
Business Central offers multiple depreciation methods to meet different accounting and tax requirements:
| Method | How It Works | Example |
|---|---|---|
| Straight-Line | Equal depreciation each period | $12,000 asset over 4 years = $250/month |
| Declining Balance | Higher depreciation in earlier years | 25% declining balance |
| DB 1/DB 2 | Double/Triple declining balance variations | Faster write-off of assets |
| Manual | User-controlled posting | Irregular write-offs |
| User-Defined | Custom calculation | Tailored to local tax laws |
🔹 Example Workflow
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Acquire asset – Create FA Card, assign FA Posting Group, post acquisition via purchase invoice or FA G/L journal.
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Set depreciation – Assign depreciation book, method, and start date.
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Run depreciation – Use Calculate Depreciation batch job (monthly or yearly).
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Track maintenance & insurance – Record costs directly against FA Card.
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Dispose asset – Post sale or scrap through FA journals.
🔹 Reports and Analysis
Business Central provides a variety of FA-related reports:
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Fixed Asset – Balance → Overview of acquisition cost and book value
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Depreciation Book Report → Depreciation per asset or group
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Insurance Coverage → Track insured vs. un-insured assets
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Maintenance Costs → Review expenses tied to asset upkeep
🔹 Best Practices
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✅ Use FA Classes and Subclasses for better reporting and filtering
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✅ Separate depreciation books for accounting vs. tax compliance
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✅ Regularly run FA Reconciliation to align with G/L
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✅ Post maintenance and insurance costs directly to assets for true lifecycle cost tracking
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✅ Review disposals carefully to capture gains/losses correctly
🔹 Conclusion
The Fixed Assets module in Business Central provides a robust framework to manage long-term investments, ensuring compliance, accurate reporting, and lifecycle tracking. With proper setup of FA Cards, Posting Groups, and Depreciation Books, businesses can automate much of the work while gaining better financial insight.