One of the coolest new features in GP 2016 R2 is the POP to Fixed Assets link which now includes taxes!  Have you in the past calculated by hand the cost of a line item in the purchase order with taxes included so that you could bring it into the Fixed Asset module as the total cost for that item?  When you went to Fixed Assets to bring in that line item, the cost for that item would have to be adjusted for the amount of the tax.

For example:

Item – Chair was $1,000 with $70 of taxes so the total cost of that chair to you is $1,070.

When adding that item to Fixed Assets the amount in the Fixed Asset Purchasing Transactions window would only be $1,000. If you wanted the total cost, you would have to adjust the amount in the Asset General Information Window.

Now if you mark “Include Tax in Acquisition Cost” in the Fixed Assets Company Setup window, the total amount will be in the Fixed Assets Purchasing Transactions window to bring into the new asset.

Caution however:  You may have it set up to distribute taxes to a tax expense account.  If you don’t change those tax accounts when receiving the purchase order to your clearing account, then the amount cleared from the purchasing account will be more than originally was debited there in the receiving.

Example:  Item Cost $1,000 – recorded to the purchasing clearing account.  The taxes of $70 by default would be expensed to the Tax Expense account.  You will need to change the distribution of those taxes to the purchasing clearing account.  When you add the item to Fixed Assets, the fixed Assets Purchasing Transaction will be for $1,070 and will credit the purchasing clearing account for that total of $1,070.

In conclusion – great that it will include the taxes now, however you need to be really careful about where those taxes are getting posted during the PO receivings transactions!

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by Barb Schroth for RSM

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