FA Return to Vendor

In situations where you need to return a fixed asset to a vendor or correct an erroneous purchase of a fixed asset in the system, a purchase credit memo document is used.

If the fixed asset has been purchased and has not yet been released, it is enough to create a purchase credit memo based on the posted purchase invoice.

You can create a credit memo in the following ways:

from the posted purchase invoice page, click Correct > Create Corrective Credit Memo;
create a new credit memo manually and, after filling in the vendor number field, click Prepare > Copy Document and select the posted fixed asset purchase invoice in the document copy window.

A credit memo will be created that fully matches the posted purchase invoice and is applied to it. After the credit memo is posted, the Status field on the fixed asset card changes to Returned and there will be no amounts on the depreciation books.

Note
If you mark the Correction checkbox for a credit memo (on the General tab), posting such a credit memo will create reversal entries. In this case, the Status field on the fixed asset card will be cleared.

If the fixed asset was purchased and released, before creating a purchase credit memo, you must cancel all the entries that followed the purchase invoice in reverse chronological order.
To cancel depreciation and release entries, we recommend using the Cancel Entries function. To do it:

Go to FA Ledger Entries page of the corresponding fixed asset.
Select the line with depreciation entry (if any) or release entry and click Cancel Entries. The release entry must be cancelled for all depreciation books where it is posted.
Corresponding lines will be created in the Fixed Asset G/L Journal.
Create balancing lines manually or by clicking Insert FA Bal. Account and post them.

Note
In order for the entries to be canceled as a reversal, the Mark Errors as Corrections setting must be set in the depreciation books.

After the fixed asset release entries are cancelled, the Status field on the fixed asset card will change to Inventory and the purchase amount will be displayed in the depreciation ledger used for the fixed assets before release. Next, we create a credit memo according to the scenario described above.

Important
If costs, such as shipping, have been distributed to a fixed asset and cannot be returned to the vendor, it is recommended that they be charged to the company expenses.
To do this, use the Fixed Asset G/L Journal. In the journal, indicate the general ledger expense account as the balancing account and post the journal lines.

See Also​

See Also