Using Asset Value Adjustment in ERPNext

ERPNext
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Asset value adjustment is crucial for maintaining accurate financial records, reflecting changes in an asset’s value due to wear and tear, repairs, upgrades, or market revaluation. It’s the act of revaluing, appreciating, or depreciating an asset’s value.

Consider a manufacturing company that uses various machinery in its production processes. Over time, these machines may suffer from wear and tear, decreasing their efficiency and value. Conversely, the company might invest in repairs and upgrades, enhancing the machinery’s performance and value.

Here’s a simple way to adjust asset value in ERPNext:

  1. Navigate to the ‘Asset Value Adjustment’ list and select ‘New’.
  2. Choose the asset whose value you want to adjust or change.
  3. Specify the date.
  4. Enter the asset’s current and new value.
  5. After providing all the necessary details, select ‘Save’ and ‘Submit’.
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This scenario only considers the decreased value of the Asset. It accomplishes this by decreasing the Accumulated Depreciation and Depreciation Cost accounts by the value lost.
However, there is no consideration for increase in Asset value via accounting requirement. Say Inflation Revaluation.
This must me included or the functionality renamed.