Best Practices - Using FAM (Fixed Assets Management) 

Written By Sarah Ryabinky

Effectively utilizing NetSuite’s Fixed Assets Management (FAM) module can streamline your asset management processes and enhance financial reporting accuracy. Here are some best practices to consider: 

1. Comprehensive Asset Data Entry:  

Ensure all relevant details are accurately recorded for each asset. Utilize the following Asset fields for accurate tracking of an Asset: 

  • Acquisition cost 

  • In-service date 

  • Estimated useful life  

  • Maintenance schedules 

This thorough documentation facilitates precise tracking and reporting throughout the asset’s lifecycle.  

2. Standardize Asset Types and Depreciation Methods: 

Define clear asset categories and assign appropriate depreciation methods to each. NetSuite supports various standard depreciation methods, including Straight Line, Fixed Declining, Sum of Years Digits, and Asset Usage, as well as user-defined methods. Consistent application of these methods ensures uniformity in financial reporting. 

Note that Asset Types also define the GL Accounts to be used for the Assets under the same Types; defining the accounts at this level is efficient in Asset creation. 

 3. Automate Asset Creation from Transactions:  

Leverage NetSuite’s capability to automatically propose or create asset records from transactions such as purchase orders, vendor bills, and inventory transfers. This automation reduces manual data entry and minimizes errors.  

These processes also provide control measures in defining Assets which include approvals of Asset Creations and merging multiple asset transactions into one. 

4. Regular Depreciation Processing:  

Schedule and execute depreciation runs consistently, aligning with your financial reporting periods. NetSuite allows flexibility in selecting accounting periods for depreciation, accommodating scenarios like seasonal asset usage. 

5. Monitor Asset Transfers and Disposals:  

Accurately record asset transfers between locations or subsidiaries, and document disposals, including sales or write-offs. This practice maintains the integrity of your asset records and ensures compliance with accounting standards. 

6. Utilize Reporting and Analytics Tools:  

Take advantage of NetSuite’s reporting features to generate detailed analyses of asset valuation, depreciation, and other key metrics. Regularly reviewing these reports aids in informed decision-making and financial planning. 

7. Ensure Compliance with Lease Accounting Standards: 

If managing leased assets, use NetSuite’s lease accounting functionalities to comply with standards such as ASC 842, IFRS 16, and GASB 87. This includes capturing key lease details and automating the posting of lease and interest expenses. 

8. Maintain Up-to-Date Maintenance and Insurance Records:  

Keep current records of maintenance schedules and insurance details within the FAM module. This practice helps in planning maintenance activities and ensuring adequate insurance coverage for your assets. 

By adhering to these best practices, you can optimize the use of NetSuite’s Fixed Assets Management module, leading to more efficient asset management and accurate financial reporting. 

Case Study: Inaccurate Depreciation for Mid-life Assets 

Executive Summary 

This case study addresses one of the most common issues concerning Managing Assets imported into NetSuite at their Mid Life, incorrect Depreciation Amounts.  

The most common cause of incorrect Depreciation Amounts come from assets created via CSV import where depreciation is already in progress.  

This is a deep dive into the process of creating Mid-life assets in NetSuite to ensure that all required fields that make up for the Scheduled Depreciation Amounts are correct once users start recording Depreciation for these Assets. 

Problem Statement 

When running Asset Depreciations, the Depreciation amounts specifically for Assets imported into NetSuite are either understated or overstated due to incorrect scheduled amounts.  

Case Background / Context 

  1. During Implementation, physical Assets are either manually depreciated or depreciated from an external source to post Depreciation Expense monthly. 

  2. These assets are imported into NetSuite at its middle life where it is expected to automatically post Depreciation based on a Depreciation Schedule. 

Analysis 

  1. The incorrect amount can be caused by incorrect values of the following fields when importing Midlife Assets: 

    a. Current Net Book Value

    b. Last Depreciation Date

    c. Last Depreciation Period

    d. Depreciation Start and End Dates

    e. Depreciation Active

  2. The Incorrect cumulative amount can also be caused by the background processes of the Fixed Asset Module where scripts are not configured correctly to run during Import. 

  3. Depreciation History Records can also be incorrectly created when during import, background scripts are not running when the Run Server SuiteScripts are not turned on. 

Solution / Strategy 

The solution is to ensure proper import of Mid Life Assets. The following steps must be taken consecutively to ensure accuracy of the module in creating the Depreciation Schedules along with Bet practice notes: 

 I. Prepare CSV Import Template for Asset Record 

  1. Prepare CSV Import file by using the template found in this article to ensure that all fields are taken into account. 

Sample Template:

2. Notes on specific fields to consider: 

a. Depreciation Active = Set to TRUE 

b. Last Depreciation Date = Enter the date of the asset’s most recent depreciation. This means that the last date of depreciation before starting depreciation in NetSuite. (e.g. If the current month is Nov 2024 but during implementation, the last known depreciation of the Assets was 9/30/24 and we intend to record the Next depreciation of Oct 2024 in NetSuite, it is important to take note that this field needs to be set at 9/30/24) 

c. Last Depreciation Period = Enter the period number (within the lifetime of the asset) in which the asset was most recently depreciated. Ensure accuracy on this value as this will drive the Depreciation Schedule left for the Asset to depreciate. 

d. Current Net Book Value = Enter the current net book value. The current NBV is calculated as the original cost less the accumulated depreciation and write-down amounts. 

3. Test Import in a Test/Sandbox environment first and validate the results before performing steps in Production. 

II. Import file

  1. Once the CSV File is prepared and ready, navigate to  Setup > Import/Export > Import CSV Records 

  2. Set the following on the first step and select the CSV File created: 

    • Import Type: Custom Records 

    • Record Type: FAM Asset

  3. Click Next 

  4. On Import Options > Data Handling, select Add 

  5. Click on Advanced Options and make sure the Run Server SuiteScript and Trigger Workflows is enabled. 

  6. Click Next 

  7. Map all the CSV Columns to their corresponding NetSuite Fields. 

  8. Click Next 

  9. Fill out the Import Name and click Save & Run. 

III. Prepare CSV Import Template for Depreciation History Record 

  1. Create a Saved Search for all Imported Assets in Step II and extract Excel sheet 

  2. Copy the Internal ID of Each Assets and the Asset Current Cost and Current Net Book Value 

  3. In a Separate Sheet Paste the copied columns keeping the Internal ID column and create a new Column to get the different of the Asset Current Cost and Current Net Book Value. This should be the Amount column 

  4. Set the Type to Depreciation 

  5. Proceed to Import by selecting: 

    • Import Type: Custom Records 

    • Record Type: FAM Depreciation History 

  6. Map necessary fields 

IV. Trigger Reset Asset Value button 

  1. Go to Fixed Asset > Setup > System Setup – note that only Administrators have this permission.  

V. Trigger Precompute Depreciation Values button 

  1. Do this after completion of the Reset Asset Values 

  2. Trigger the button in the same navigational path. Again, only administrators have this permission 

VI. Review Assets Depreciation Schedule before proceeding to running Asset Depreciation process 

Results / Outcomes 

Steps above should be able to: 

  1. Create the Assets,  

  2. System will create Acquisition Depreciation History based on Start Date,  

  3. Imported Depreciation History record should record Accumulated Depreciation for the Asset to be seen in the reports, and  

  4. System will create Depreciation History Records for the rest of the Asset Life of the Asset to be used in each month’s Depreciation Run. 

Conclusion 

It is important to follow each step and ensure the configuration is correct to ensure that the standard functionality of the module will be used. 

Recommendations 

  1. Provide necessary permissions to users to import the records needed but make sure to create sessions with an Administrator to trigger system scripts for completion of the steps. 

  2. Always test the imports in Sandbox first before proceeding to production. 

  3. Run FAM Reports to show data of all Assets for easier Reconciliation. 

Sarah Ryabinky
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