Indexation in Fixed Assets in Business Central (FA - Blog - 4)

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Indexation: Adapting Asset Values for Inflation

Indexation is a vital Financial Tool that adjusts the value of Assets to Account for Inflation. By increasing the Original Cost of an Asset in proportion to Inflation, indexation ensures more accurate tax liability calculations, especially for long-term capital gains (LTCG). 

Indexation in Dynamics 365 Business Central

Dynamics 365 Business Central simplifies indexation for managing Real Estate & Financial Assets. Its robust feature permits businesses to Track & Record adjustments in Asset Values, facilitating precise LTCG calculations.

How to Enable Indexation:

  1. Navigate to the Depreciation Book.
  2. Enable the Allow Indexation option.

Once Activated, this feature streamlines the indexation process.

Index Fixed Assets

Use the Search function to open the Index Fixed Assets page.

  • Depreciation Book: Select the depreciation book where indexing will apply.
  • Index Figure: Enter the index percentage (e.g., 104 for +4%, 98 for -2%).
  • Posting Dates:
    • FA Posting Date: Specify the date for ledger entries.
    • Posting Date: Set the date for G/L journal entries. Ensure both match if required by the depreciation book setup.
  • Document No.: Leave blank to auto-generate numbers based on the series.

  • Posting Description: Enter a description for the transaction.

  • Balancing Account: Enable Insert Bal. Account to auto-assign balancing accounts.

  • Transaction Types: Choose transaction types to include in the indexing process.

  • Fixed Asset Filters: Apply filters to select specific fixed assets for indexing.


Index

In the Index Fixed Assets pop-up there are some options in Index. We can control from here for which Kinds of an entry we want to Index.


Run and Post 

Click OK to generate journal lines. Review and post them in the FA or G/L journal.

Error Correction:

  • Use Cancel FA Ledger Entries to Reverse & Rerun the Batch Job.

This ensures accurate inflation adjustments for fixed asset values.

Index For Insurance

There is a Separate Pop-up from which we can control the Indexation of the Insurance.

Search "Index Insurance" in the Tell Me


The concept is Absolutely Similar and the Description of the fields also. Microsoft just create a Separate Index page for the Insurance.

If you want to see all this in a Video, Then Click on the Link below.


I hope you find this article helpful.

Best Regards,

Ahmad Subhani

D365 Business Central Functional Consultant

Email - ahmadsubhani424@gmail.com

WhatsApp - +923357687164


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