Asset capitalization

Transaction → Asset Capitalization adds cost to an asset that is already registered — a major overhaul, an upgrade, a significant spare part. Rather than treating that spend as a one-off expense, capitalization adds it to the asset's book value and, where appropriate, extends its useful life.

A new engine in a truck is the classic case: the truck is worth more and will last longer, and both facts belong on the asset record.

The lifecycle, submitting, fixing and voiding are in Document basics.

Three ways to capitalize

The Capitalization Type decides how the spend is recorded.

Type	What happens	Use it when
Direct to Main Asset	The cost is added to the existing asset's value, and any extra life to its useful life. No new asset is created	The spend is inseparable from the asset — an overhaul, a refit
Sub Asset Independent	A new asset is created underneath the main one, tracked separately with its own record and depreciation	The addition has a life of its own — a machine attachment, an add-on module
Sub Asset Merged	A sub-asset is recorded and merged into the main asset's value	You want the component recorded, but the value carried on the parent

If in doubt, ask whoever owns the accounts — the choice affects depreciation and reporting, and it is much easier to decide before approval than to unpick afterwards.

Create the document

1. Open Transaction → Asset Capitalization and select the create button.
2. Fill in the header — its title, the currency, and the context.
3. Save. The number is generated and the status is DRAFT.

Add the assets and their costs

1. On the Asset List tab, add the main asset being capitalized.
2. Choose the Capitalization Type.
3. Enter:
   • A description of what the cost was for
   • The value being added
   • The additional useful life, in months, if the spend extends the asset's life
4. For a sub-asset type, also give the sub-asset's number, name, purchase date and currency.
5. Repeat for each asset.

Describe the cost properly. "Engine replacement, invoice INV-2026-0412" is what makes the entry intelligible in three years' time; "upgrade" is not.

Attachments and Carbon Copy

Attach the invoice or work order on the Attachment tab, and add finance on Carbon Copy.

Submit and approve

Select Document Confirmation. The document becomes PENDING and approvers are notified.

On approval:

• The asset's value increases by the amount capitalized
• Its useful life extends by the additional period, if one was given
• Sub-assets are created where the type calls for them
• The change is written to the capitalization log and the asset's history

Depreciation from that point uses the new value and the new remaining life. Earlier calculations are not rewritten. See Depreciation.

If the document is rejected it returns to you as a DRAFT; fix it and use Confirm Fix.

The capitalization log

Every asset has a capitalization log, reachable from the asset's Capitalize tab, showing each capitalization applied to it:

Column	What it shows
Time	When it was applied
Document	The document that did it
Main Asset / Sub Asset	What was affected
Type	Direct, Sub Asset Independent or Sub Asset Merged
Previous Value → Addition → New Value	How the value changed
Previous Period → Add Period → New Period	How the useful life changed

The log can be filtered by type and date range. It answers the question auditors ask most often: why is this asset worth more than it was bought for?

Capitalization versus a change document

You want to	Use
Add new spend to an asset's value	Asset Capitalization — this chapter
Correct a value that was recorded wrongly	Asset changes

The difference is real money versus a typo. Capitalization says the asset genuinely became more valuable; a change says the record was wrong. Only capitalization appears in the capitalization log.

INFO

The initial value of an asset is not capitalization — it is set when the asset is first registered. See Asset addition.

Common problems

Problem	Why	What to do
An asset is not available	It is disposed, outside your visibility, or locked by an active Stock Opname	Check its status and your assignments
Unsure which type to use	The three behave quite differently	See the table above, and ask whoever owns the accounts
Depreciation did not change	It applies from the approval onwards, not retrospectively	Check the next calculation. See Depreciation
A sub-asset did not appear	The type was Direct to Main Asset	Direct capitalization creates no sub-asset
The log is empty	Nothing has been capitalized on this asset	Expected