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Difference Between Moving and Returning an Asset

Question & Answer


Question

Is there a functional difference between moving and returning an asset?

Cause

A user can either move or return an asset that has been either transferred, issued, or otherwise moved to a different location. There is a functional difference and a financial/accounting difference between moving and returning an asset.

Answer

It is important to know when to move an asset and when to return an asset.

The return asset function should be used instead of the move/modify asset transaction when an item has been consumed by a GL entity, such as an issue to a Work Order, but was not used. The accounting scenario is that the asset needs to be returned to the Storeroom at its full, issued value. In other words, a return negates an issue transaction.

The move asset function should be used in the case where it is necessary to account for a transfer of value; the movement of an asset from one operating location to another operating Location. The accounting scenario is that the value of the asset changes from the GL Account of one location to the GL Account of another. This applies to rotating assets as well, however the inventory costs associated with the rotating asset are also tracked within the Rotating Suspense account. At the time the rotating asset is moved into an inventory location, any transactions that were written to the Rotating Suspense account will then be transferred to the Storeroom’s Control Account. Additionally, this will adjust the average cost.

The Average Cost is calculated as follows:

In the Receipt and Purchasing scenario:
(Old Balance * Old Average Cost) + (Receipt Qty * Receipt Cost)
(Old Balance + Receipt Qty)

In the Receipt and Subsequent Move of the Rotating Asset to Storeroom scenario:
(Old Balance * Old Average Cost) + (Move Qty * Inventory Cost)
(Old Balance + Move Qty)

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Document Information

Modified date:
17 June 2018

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swg21661838