This article describes how you can use Dynamics 365 products to support your organisation's business process to acquire assets

Organisations need to strategically manage their assets to streamline operations, enhance decision-making, and remain competitive, all while maintaining financial balance.

The functionality for acquiring assets plays a crucial role in supporting the acquisition, tracking, and management of assets throughout their lifecycle. Effectively managing this process ensures that businesses can optimize the use of their resources, prevent inefficiencies, and make well-informed decisions regarding their assets.

Typically, asset data is maintained in spreadsheets and is configured after the general ledger setup in Dynamics 365. Many organizations, however, tend to delay the data migration process related to fixed assets or asset management. It is not uncommon for them to encounter gaps when trying to integrate balance or transaction-type data into their business solution. To mitigate this risk, it is recommended that fixed asset migration be initiated early in the project. This allows organizations to thoroughly test the data and validate the processes that the business team follows, ensuring smoother transitions later on.

With the asset leasing functionality in Dynamics 365 Finance, organizations can acquire and use assets without the need for significant upfront capital. Instead of making large purchases, businesses can lease assets from leasing companies for a fixed term. The asset leasing module in Dynamics 365 Finance enables the creation of legal contracts between the lessee and lessor, providing a flexible and cost-effective alternative for managing assets.

Here are some common methods for acquiring assets in Dynamics 365 Finance and Supply Chain Management:

I. Acquisition through Fixed Asset Journal Process

II. Acquisition through Procurement and Sourcing Process

III. Acquisition through Accounts Payable (Vendor) Invoice Process

IV. Acqusition through Inventory to Fixed Asset Process

V. Acquisition through Project Management and Accounting (Capital Asset) Process

I. Acquire through Fixed Journal Process

Acquisition is the initial phase of the asset life cycle. This phase offers the most options for ways to record the acquisition. You can manage acquisitions by using the Acquisition, Acquisition adjustment, and Transfer from reserve transaction types.

An asset acquisition can use the Acquisition transaction type, whether it's an external purchase or an internal posting of self-assembled assets.

You can use the Acquisition adjustment transaction type when the parameter setup prohibits multiple acquisitions or when you need to post part of an acquisition to a special ledger account.

Depending on how you set up the Allow multiple acquisitions parameter, you can activate one or an unlimited number of acquisitions for each asset for each book. You should have multiple acquisitions for each asset when you expect to post multiple transactions that affect the acquisition value of an asset.

For example, when a company purchases a truck and truck body from two vendors, it might record two separate transactions, but the completed truck with both components becomes the actual asset.

To change this parameter, select Fixed assets > Setup > Fixed assets parameters. For multiple acquisitions, select the Allow multiple acquisitions checkbox. If you want only one acquisition for each asset for each book, turn off the Allow multiple acquisitions option.

Record an acquisition:

Consider the following scenario:

Adventure Works Cycles orders computers for new employees when they sign the employment contract. The accountant at Adventure Works Cycles receives notification that a new staff member's employment has started.

The accountant is responsible for making sure that the fixed asset is created and recorded correctly, and they create the fixed asset for each computer. During processing, the acquisitions manager usually records asset acquisitions when the Purchasing department posts the computer invoice. At the end of each month, the accountant verifies that these acquisitions are correctly recorded by comparing the Accounts payable records to an Acquisition proposal.

The following steps show how to record acquisitions.

After the creation of Fixed Asset under Fixed assets > Fixed assets > Fixed assets, navigate to Fixed Assets > Journal Entries > Fixed Assets Journal,

Create a new record on the header and click on lines,

On lines, select Fixed Asset and enter details as shown below and click on post,

Voucher entries for acquisition are shown below.

Once the fixed asset acquisition journal is posted, the Fixed asset master status should show 'Open' with updates to acquisition date, acquisition price, and placed in service date

II. Acquisition through Procurement and Sourcing Process

Finance provides many ways to create and acquire fixed assets directly from purchasing. Because of this variety, companies with complex asset acquisition requirements can meet those requirements.

Additionally, Finance offers several ways to create and acquire fixed assets directly from the Procurement and sourcing area, A user can assign a purchase line item as a fixed asset purchase without needing to create the asset record beforehand. The system automatically creates the asset during the product receipt or vendor invoice journalizing process.

The following methods are available for integrating Fixed assets and Accounts payable, and you must use the same method for all fixed assets:

     - Create a fixed asset manually before you add the fixed asset number to the line on the purchase order or vendor invoice. The system automatically posts an acquisition transaction for the asset when you post the vendor invoice. This method is the default.

     - Create a fixed asset manually before you add the fixed asset number to the line on the purchase order or vendor invoice. The system doesn't post an acquisition transaction for the asset when you post the vendor invoice.

     - Have the system automatically create a fixed asset when you post a product receipt or vendor invoice that has the Create a new fixed asset option turned on. The system automatically posts an acquisition transaction for the asset when you post the vendor invoice.

     - Have the system automatically create a fixed asset when you post a product receipt or vendor invoice that has the Create a new fixed asset option turned on. The system doesn't post an acquisition transaction for the asset when you post the vendor invoice.

Note -

a. Fixed assets parameters - 

In order to avail this functionality few parameters need to be enabled under Fixed assets parameters - 

     - Allow asset acquisition from purchase order - This parameter enables the functionality of acquisition through the procurement module

     - Create asset during product receipt - This parameter enables if you wish to create asset acquisition at the time posting product receipt, if set to 'Yes', or if set to 'No', acqusition will be at the time of purchase invoice.

b. Setup business rule for identifying organisation-wide fixed asset - 

c. Organisation-wide fixed asset identifiers

More information about this functionality is available here: About fixed asset determination rules

A. Acquisition at product receipt - 

Create a purchase order

Navigate to Procurement and sourcing > Purchase orders > All purchase order or Accounts Payable > Purchase orders > All purchase orders and create a new purchase order with procurement categories and navigate to purchase lines, Fixed asset tab as shown below,

Complete steps for purchase order confirmation and post product receipt. Once product receipt is posted, D365 FO creates a new asset as shown below.

Navigate to Fixed Assets > Fixed assets > Fixed assets show newly created asset as below,

In this step asset is created however Asset is not acquired as shown below,

Navigate to purchase order and post invoice,

Once the purchase invoice is posted, the asset is acquired,

B. Acquisition at the purchase invoice

Navigate to Procurement and sourcing > Purchase orders > All purchase orders, or Accounts Payable > Purchase orders > All purchase orders to create a new purchase order. Navigate to the purchase line to add procurement category or item no. and under the Fixed asset tab, select Fixed asset number as shown below,

Confirm purchase order, post product receipt and subsequently post invoice. Once the purchase invoice is posted, the fixed asset is shown as acquired,

III. Acquisition through Accounts Payable (Vendor) Invoice Process

Another way of acquiring assets is through the vendor invoice journal. 

To acquire through vendor invoice journal, the First step is to create a fixed asset by navigating to Fixed assets > Fixed assets > Fixed assets as shown below,

Books will show it's acquired yet,

To post an acquisition entry, navigate to Accounts payable > Invoices > Invoice journal as shown below and create a vendor invoice journal with information 

Click on lines, enter the vendor account, and select fixed asset in the offset account as shown below,

On the Fixed assets tab, select the transaction type and book,

Once the journal is successfully posted, you can see asset acquisition is posted,

Voucher entries for the journal are shown below,

IV. Acquisition through Inventory to Fixed Asset Process

Sometimes organisations keep assets as inventory before placing them in service. In such a case, organisations convert inventory to fixed assets. For these purposes, you need to use the inventory to the fixed asset journal.

To acquire an asset through this process, the First step is to create a fixed asset by navigating to Fixed assets > Fixed assets > Fixed assets as shown below,

Books will show it's acquired yet,

To convert inventory to fixed assets, navigate to Fixed assets > Journal entries > Inventory to fixed assets journal, and create an inventory journal and enter details on lines as shown below,

Post inventory to fixed asset journal,

Once the journal is successfully posted, you can see that asset acquisition is posted,

Voucher entries for the journal are shown below,

V. Acquisition through Project Management and Accounting (Capital Asset) Process

Often, projects have capital expenses. Consider a scenario for a new warehouse building. Many fixed assets remain in the warehouse when a project completes. The project estimate includes these fixed assets. In this scenario, you purchase assets and link the accounts payable invoices to the project. Then. your create a fixed asset and link it to the estimate for a project. Costs for the fixed asset are carried in WIP. When you're ready to transfer the cost to the fixed asset and remove it from the estimate, you eliminate the asset from the project estimate.

Create a project that includes a fixed asset - 

A project that's linked to a fixed asset must be of type Investment project.

For example, consider a warehouse building as an asset that is being worked on. Start by creating an investment project that represents the new office supplies, Navigate to Project management and accounting > Projects > All projects and create a new investment type project as shown below,

Post expenses against the project; for this example, we will use a few expenses and hours. the screenshot below shows all transactions on the project.

Create a project estimate

To create a project estimate, follow these steps,

 - Open the project from the project management and accounting module, select the project ID and navigate to the Manage tab and click on Revenue recognition in the process menu group. Create a new estimate and enter details in the dialogue. Once record is created it will look as below,

 - Once the record is created, go to the General tab and select Fixed Asset under investment group as shown below and post the estimation,

Voucher transactions -

Eliminate the fixed asset,

When the system posts the estimate and the Percentage complete shows as 100%, the Eliminate button becomes available. In this step, select the Eliminate button,  

Voucher transactions - 

Review fixed asset -

After the elimination of fixed assets acquisition entry is posted as shown below,

This completes the Acquiring the assets process. 

Thank you! 

If you have any questions, please don't hesitate to reach out!!