In D365 FO, maintaining active assets is essential for tracking operational status, scheduling preventive maintenance, and ensuring high-value equipment remains functional throughout its useful life. This supports better asset utilization and extends asset longevity. Revaluation adjusts an asset's book value to match current fair market value and is processed through revaluation journals with offset accounts. It can increase or decrease the asset’s value, affecting future depreciation, and includes reason codes for audit tracking. Depreciation is managed using predefined books and methods like straight-line or reducing balance, with periodic proposals posted to the ledger. The system supports multiple depreciation books for compliance and stores detailed depreciation history per asset. Insurance data, including policy number, value, and coverage details, can be recorded to help manage risks and ensure proper coverage. Assets may be grouped under shared policies for easier tracking. Transfers allow movement of assets between departments, locations, or legal entities, with both physical and financial aspects tracked via journals. Each transfer records the new location, owner, and reason, maintaining historical logs. Improvements or capital enhancements are treated as additional acquisitions to an existing asset, increasing the asset’s value and updating depreciation accordingly. Improvements can be tracked individually, supporting better cost management and reporting. D365 FO provides full traceability for all asset activities and aligns with international accounting and audit standards, supporting the asset lifecycle from acquisition to disposal.

I. Revalue and adjust assets

The Fixed Asset Revaluation process is performed to adjust the book value of an asset to reflect its current fair market value. This process is important for several reasons,
     - Accuracy of Financial Statements

     - Compliance with Accounting Standard

     - Better Aseet Management

     - Impact on Depreciation and profitability
     - Support for Loan Collateral and Investor Valuation.

Let's take a look at the how to revaluate the asset.

For this example I am taking Asset we acquired previously - MACH-000015

Current valuations as below, 

Note: Note make sure you have enabled a checkbox for 'Allow net book value higher than acquisition cost' on assset book else you will receive below error,

Now to revaluate the Fixed Asset, navigate to Fixed Assets > Journal Entries > Fixed Asset Journal, Click new and select appropriate name,

Click on Lines, and create a new record,

Select Transaction type as 'Revaluation', fixed asset that need to be revaluated and amount as shown in above screenshot. Review and post the journal.

Once the journal is successfully posted, you can navigate to your asset to verify the valuation,

Voucher transaction related to revaluations as below,

The Revaluation adjustment entry will show up on the balancesheet!

II. Depreciate assets

In D365 Finance and Operations, asset depreciation is calculated using predefined depreciation books and methods such as straight-line or reducing balance. Depreciation proposals can be generated periodically and posted to the general ledger, ensuring accurate expense recognition. The system supports multiple books to comply with various accounting standards like IFRS or GAAP. Depreciation schedules are automatically updated based on changes to asset value or useful life. Detailed history is maintained per asset for auditing, reporting, and financial analysis.

To calculate depreciation for an asset in D365 FO, navigate to Fixed Assets > Journal Entries.

Create a new journal entry and select appropriate Name (e.g. FADepBook) in this case.

Click on lines, here on lines either you can enter transaction type as 'Deprecition', asset no and other details manually to enter depreciation however if there's large set of data and you want system provide depreciation amount then you can click on Functions, Depreciation proposal,

It will open a dialog where one can enter information like date, if you want to summarize the depreciation and filter records. In my case I am filtering records for one asset to save time.

Once you click ok it will generate lines on the journal,

Review the journal and post it.

III. Insure assets

To maintain insurance information on an asset in D365 Finance and Operations (D365 FO), follow these steps:

Navigate to Fixed Assets, Go to Modules > Fixed assets > Fixed assets and select the asset you want to maintain insurance for, and Open the Insurance Tab

On the Insurance form enter insurance vendor, Policy number, Agent, Policy Expiration Date, Policy Date etc.

Track and Report
Use insurance reports or inquiries to monitor coverage status, identify gaps, and ensure high-value assets are adequately insured.

Navigate to Fixed assets > Inquiries and reports > Fixed asset insurance report. You can filter the records to show assets with only insurnace or without insurance.

IV. Transfer assets

1. Intra-company Transfer (Within same legal entity)

To transfer fixed asset between department, location, cost enter etc. without affecting the financial value of asset, navigate to Fixed Asset > Fixed assets > Fixed Asset and select the asset you want transfer and click on 'Transfer asset' button on the header,

This opens a dialog box where you can enter info on the right side where you want the asset to be transferred to,

Click ok, and review the data on below form,

Click ok to complete the process.

2. Inter-company Transfer (Between different legal entity) - 

This is the most awaited feature, as per microsoft this feature will be available for public preview in Jul 2025 and GA in Sept 2025, you can find more info here

Once this feature is available we will revisit this article.

Thank you for your time! If you have any questions, please don't hesitate to reach out!