Non-current assets

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The IFRS accounting subsystem incorporates the following tools for non-current assets (NCA) management:

• NCA accounting settings (see section IFRS settings — Non-current assets).
• Non-current asset documents.
• Fixed assets, Intangible assets, Assets under construction catalogs.

Setting up NCA accounting parameters

Before you start accounting in the IFRS accounting — IFRS settings — Non-current assets subsystem, you need to set it up. You can select the following accounting settings:

• General NCA accounting settings.
• Accounting parameters of some NCA objects.

General NCA accounting settings

To set up general settings, click IFRS settings.

General NCA accounting settings contain the following parameters for NCA accounting under IFRS:

• Algorithm used to calculate depreciation for all NCA objects.
• Method for reserve accounting of NCA revaluation in capital.

Algorithm used to calculate depreciation for all NCA objects

The following depreciation calculation algorithms are available:

• RAS. To use this algorithm, select the check box. Depreciation accumulation starts on the first day of the month following the month of receipt of the NCA object. Depreciation accumulation ends on the first day of the month following the month of disposal of the NCA object. For details, see 33.FAS 6/2020.
• IFRS. To use this algorithm, clear the check box. Depreciation accumulation starts on the date of receipt of the NCA object. Depreciation accumulation ends on the date of disposal of the NCA object. For details, see 33.FAS 6/2020.

Method for reserve accounting of NCA revaluation in capital

In the Non-current assets section, in the NCA revaluation reserve accounting field, in the drop-down list, select an NCA revaluation reserve accounting method under the NCA accounting model by revalued cost:

• Write-off on disposal. When an object is disposed, a revaluation reserve in the Capital section of the statement of financial position will be written off to the retained profit account.
• Straight-line depreciation. When an asset is depreciated, a revaluation reserve in the Capital section of the statement of financial position will be written off to the retained profit account on a straight-line basis.

Setting up parameters of some NCA objects

Specify parameters of NCA accounting under IFRS for each NCA object in the object card when you enter it under NAS.

In NCA object accounting settings in the IFRS information section of the NCA object accounting card, specify the following:

• NCA class.
• NCA object accounting option:
  • □ Translation.
  • □ Parallel accounting.
• NCA object accounting parameters for an NCA type:
  • □ NCA object accounting model: by revalued cost or by actual cost.
  • □ Check box that enables or disables depreciation accumulation.
  • □ GL accounts of initial cost, accumulated depreciation, and impairment of NCA object.
  • □ NCA object depreciation parameters:
    • Depreciation accumulation method.
    • Useful life.
    • Profile of NCA depreciation expense allocation, including the account and related dimensions (business unit, if any, cost items).
  • □ NCA object revaluation parameters (if necessary).
  • □ NCA object impairment parameters (if necessary).
  • □ NCA object disposal parameters.

NCA object accounting options

When entering documents in RAS, in the NCA object card, in the IFRS information section, specify Accounting option for the NCA object under IFRS:

• Parallel accounting.
• Translation.

If you specify the Parallel accounting option, business operations are not automatically translated from RAS to the IFRS subsystem. To keep parallel accounting in accordance with IFRS requirements, you need to manually import the business operations through the IFRS accounting documents named NCA input events and then adjust the imported data.

If you specify the Translation option, business operations related to this NCA object are automatically translated from RAS to the IFRS subsystem and do not appear in the IFRS subsystem documents.

If you do not specify any Accounting option in the IFRS information section, the Translation option is used by default.

So, you can keep parallel accounting of some NCA classes or some NCA objects, and translate other NCA objects. You will need this approach in most cases.

Keep parallel accounting for buildings, facilities, and large expensive NCA objects whose independent measurement is justified. Usually, the cost of small NCA objects under IFRS, such as office equipment, inventory, and vehicle, does not differ from their cost under NAS. The accounting data of these NCA groups is not translated.

When accounting and depreciation parameters under NAS and IFRS differ significantly, use NCA parallel accounting. If differences are not significant for most objects, use the Translation accounting option. As a result, NCA with this accounting option set will be accounted for under IFRS according to the same principles as under NAS.

All NAS data on objects with the Parallel accounting radio button selected are transferred to IFRS accounting registers once you post the Enter NCA events document. Use this document to generate NCA receipt, Commissioning, and other documents. For these documents, select the Batch input check box in the document list. These objects are not included in the Translation document. In the Entry translation reconciliation report, they are displayed in the NCA column.

In the Translation templates catalog, configure the respective mapping (account mapping).

NCA types

The section of accounting for non-current assets under IFRS provides a unified NCA classification under NAS and IFRS. In the NCA type field of the item form, select the NCA type from the drop-down list. This NCA type will determine the applicable rules of NCA accounting under IFRS:

• Fixed asset.
• Intangible asset.
• Investment property.
• Investments in non-current assets.
• Biological asset.
• Non-current asset for sale.

NCA class is unrelated to the NCA type. NCA class is used for independent classification of NCA objects in comments to the IFRS reporting. For example, the NCA class "Vehicles" might change its type from "Construction in progress" to "Fixed assets" and further to "For sale".

Specify the accounting parameters for each NCA class. Accounting parameters determine the class to which the object belongs: its GL account, accounting model, and parameters of depreciation, impairment, and disposal. These parameters are different for different NCA classes.

NCA object accounting parameters

If depreciation is accumulated for this class, select the Accrue depreciation check box.

Bulk setting of NCA accounting parameters

If standard IFRS accounting parameters, such as a single depreciation period, the same group, depreciation method, and so on, are available for a group of fixed assets, intangible assets, or deferred expenses, create a folder in the corresponding catalog to place such objects.

For bulk setting of accounting parameters, use the Default NCA accounting parameters information register. In the information register, you can set NCA accounting parameters for a group or folder of fixed assets, or for all fixed asset objects. You will not need to specify accounting parameters every time you create an object. The radio button will be set to Parallel accounting by default.

NCA accounting model

In the NCA accounting model field, select the NCA accounting model from the list: Revaluation model or Accounting by actual costs.

NCA GL accounts

In the NCA GL accounts section, fill the GL account of initial cost and Accumulated depreciation account fields. This will automatically fill the corresponding accounts in NCA objects when you generate documents, depending on their class.

NCA depreciation parameters

In the Depreciation parameters field of the selected NCA depreciation parameters catalog item, select the parameter for this class and specify the depreciation accumulation method, useful life, and profile of depreciation expense allocation.

NCA revaluation parameters

In the Revaluation parameters of the selected NCA revaluation parameters catalog item, select the accounting parameter for this class.

In the Accounting methods of accumulated depreciation on revaluation field, select the appropriate accounting method from the list: Proportional recalculation or Write-off to initial cost. Specify the accounts and their dimensions in the following fields: Revaluation income account, Revaluation expense account, Accumulated revaluation account, and GL account of reserve.

NCA impairment parameters

In the selected NCA impairment parameters catalog item, select the accounting parameter for this NCA type.

Specify the accounts and their dimensions in the Impairment expense account and Accumulated impairment account fields.

NCA disposal parameters

In the Disposal parameters field of the NCA class form in the selected NCA disposal parameters catalog item, select the accounting parameter for this class.

Specify the accounts and their dimensions in the parameter form fields: Disposal expense account and Disposal account for initial cost and accumulated depreciation.

Accounting for NCA

NCA accounting under IFRS is based on the following NCA parallel accounting documents stored in IFRS accounting — Non-current assets — NCA documents:

• NCA opening balance entry.
• NCA event entry.
• Enter NCA information.
• NCA receipt.
• NCA commissioning.
• NCA depreciation accumulation.
• Reclass of NCA from expenses and inventory items.
• NCA renovation.
• NCA revaluation.
• NCA impairment.
• NCA disposal.
• Change NCA parameters.
• NCA productivity.

With parallel accounting documents, you can keep accounting of NCA objects under IFRS and under NAS at the same time.

For each object that requires Parallel accounting under IFRS, open the NCA object card, and in the IFRS information section, set Accounting option to Parallel accounting.

You can fill in each NCA parallel accounting document in either of the following modes:

• NAS.
• IFRS. This mode is useful, for example, for entering events that are not supported by NAS.
• NAS and IFRS. This mode is recommended.

In all of these modes, NAS data is displayed for reference purpose only and does not affect actual data stored in NAS.

Fair value of NCA objects may differ from the value specified under the national accounting standards. So, when using IFRS for the first time, NCA evaluation at fair value is required. Classification of NCA objects under national accounting standards also may differ from IFRS. For example, some prepaid expenses can be reclassed to NCA objects.

The application automatically calculates the profit (loss) from disposal of revalued non-current assets and recalculates their depreciation.

Enter NCA opening balance document

Use this document to enter opening balances under IFRS accounts in the first reporting period. The document contains information about objects that were already registered in the company at the beginning of the reporting period, but whose cost differs from NAS. For example, this is the first IFRS application where all non-current assets are measured at fair value. Use this document when entering data into the IFRS accounting subsystem for the first time.

The NCA objects data, which at the beginning of the reporting period were already accepted for NAS accounting, are loaded directly from the NAS integrated accounting system or entered manually into the table field of the document.

In the NCA opening balance entry document, fill in the following NCA data as of the opening balance entry date:

• NCA name.
• NCA accounting parameters (IFRS).
• Depreciation allocation profile (IFRS, NAS).
• Date of recognition (IFRS, NAS).
• Initial cost (IFRS, NAS).
• Accumulated depreciation (IFRS, NAS).
• Accumulated revaluation of initial cost/net book value (IFRS).
• Accumulated revaluation of depreciation on proportional revaluation (IFRS).
• Revaluation reserve in capital (IFRS).
• GL account of initial cost (IFRS, NAS).
• GL account of accumulated depreciation (IFRS, NAS).
• Depreciation accumulation method (IFRS, NAS).
• Useful life (IFRS, NAS).
• Receipt method.
• Residual value (IFRS).
• Financial responsibility center.
• Line of business.

Based on this data, the document generates entries on IFRS GL accounts to record NCA objects in correspondence with off-balance account 000 “Auxiliary: NCA opening balance”. All entries are made for amounts under IFRS measurement.

In the Initial cost (NAS), Initial cost (IFRS), Accumulated depreciation (NAS), and Accumulated depreciation (IFRS) fields, enter the amounts generated under NAS and IFRS measurements as of the date of entering opening balance.

You can automatically calculate the accumulated depreciation under IFRS for previous periods as of the date of entering opening balance. For this, click Fill in, and then click Calculate depreciation for previous IFRS periods. You can use this option only if there is no difference in the measurements of the initial cost under IFRS and NAS, but the useful life of the objects differ.

In the Revaluation reserve in capital (IFRS) field, specify the accumulated revaluation amounts for objects in the Capital section of the statement of financial position. Fill this field only when non-current assets are accounted for under the revaluation model and only when accounting for each object is required for NCA revaluation on the following accounts: 5.4.00.83.01 "Fixed asset revaluation reserve" and 5.4.00.83.02 "Intangible asset revaluation reserve". For example, to depreciate the revaluation reserve while using the object to account 5.5.00.84.01 "Retained profit/unrecovered loss of the reporting period".

Fill the Accumulated revaluation of initial cost/net book value (IFRS) field only when non-current assets are accounted for under the revaluation model and only if you use a separate subaccount to account for the accumulated revaluation of the NCA net book value. Use the revaluation method when you write off the accumulated depreciation to the initial cost. In this case, the Accumulated revaluation of depreciation on proportional revaluation (IFRS) field remains empty since there cannot be such a subaccount with this revaluation method.

If you use the method of proportional revaluation of accumulated depreciation, you can use separate subaccounts to account for the accumulated revaluation of the initial cost and accumulated depreciation. When you use this method, both the initial cost of the object and its accumulated depreciation are revalued. In this case, enter the amounts of the accumulated revaluation of the initial cost in the Accumulated revaluation of initial cost/net book value (IFRS) field. Specify the accumulated depreciation revaluation amounts in the Accumulated revaluation of depreciation on proportional revaluation (IFRS) field, for each NCA object.

Enter NCA events document

Use this document to:

• Import NAS data on NCA transactions within reporting period.
• Import NCA object events in batch mode.

Importing NAS data on NCA transactions within reporting period

With this document, you can enter data of the NCA transactions group. Based on the imported data, other documents will be created.

Importing data in batch mode

In batch mode, you can use a single document to import multiple events for an NCA object. The following documents can be used for this purpose:

• Enter NCA events.
• Enter NCA information..

When importing NCA events in batch mode, you can:

• Fill the document table automatically by importing data from the accounting register. To do this, click Fill in. In the menu that opens, click Fill in from accounting system.
• Fill in NCA event data manually. To do this, click Add.

During import in batch mode, NCA object events are imported in the following order:

1. Business transactions related to NCA accounting recorded in NAS.

For example, in February 2020, the following transactions were recorded for an NCA object:

• □ Receipt of the NCA object.
• □ Transfer of the NCA object.
• □ Disposal of the NCA object.
  1. Let us also assume that In this NCA object's card, in the IFRS information section, the Accounting option is set to Parallel accounting.

Objects that have the accounting option set to Parallel accounting are not listed in the Translation document. However, they are displayed in the NCA column of the Entry translation reconciliation report.

1. Specify all events that occurred to this NCA object during the reporting period in the Enter NCA events document. See illustration below for details.
2. Next, click Post and close to create documents corresponding to the NCA events.

The following documents are created in this example:

• □ NCA receipt.
• □ Change NCA parameters.
• □ NCA disposal.

In the NCA documents list, these documents are marked with a flag icon in the Batch input column. See the illustration for details.

Depending on the NCA information specified in the document and NAS accounting data, when you post the document, the following documents (or document drafts) of NCA parallel accounting are created automatically:

• NCA receipt.
• NCA commissioning.
• NCA renovation.
• NCA depreciation accumulation.
• NCA revaluation.
• NCA disposal.

If the accounting option for an NCA object is set to Parallel accounting, you need to enter NCA documents in the natural order: receipt, commissioning, renovation (if applicable), revaluation (if applicable), and disposal. Otherwise, correct registration in the IFRS register is not guaranteed.

Several rows are entered for each NCA object. One row is for one event. It allows you to enter data of several similar transactions within one NCA object. For example, you can display several renovations within one period. For each transaction, event date and kind are specified.

You can also click Add to enter the object information manually.

When importing data of each NCA object, the following data is displayed:

• Purchase/disposal/commissioning/renovation/revaluation date (NAS and IFRS).
• Depreciation parameters.
• Information about the correspondent transaction account and dimension on this account.
• Cost estimate of purchase/disposal/commissioning/depreciation/ revaluation (NAS and IFRS).

Depending on the NCA information specified in the document and NAS accounting data, when you post the document, the following documents of NCA parallel accounting are created automatically:

• NCA receipt.
• NCA commissioning.
• NCA renovation.
• NCA depreciation accumulation.
• NCA revaluation.
• NCA disposal.

To see additional tabs, click More. The Accounting parameters tab shows GL accounts of the initial cost, accumulated depreciation, and disposal of the object net book value under NAS.

When you fill the Enter NCA events document, the application generates a list of NCA's that have the Parallel accounting option selected. You can see all transactions with these NCA objects in the document. Correspondent accounts of transactions are filled automatically based on the translation template settings. Depreciation accumulation method IFRS is filled based on the correspondence to the Depreciation accumulation method NAS field. The correspondence of the depreciation accumulation methods under NAS and IFRS is predefined in the settings. If you want to change the IFRS accumulation method, select the correct field from the drop-down list manually.

When you select a method in the drop-down list, the following fields appear. Useful life: when you select the straight-line method or the reduced balance method. Acceleration coefficient: when you select the reduced balance method. Planned and actual productivity indicators and Depreciation expense account: when you select the Proportionally to output volume method. Profile of depreciation expense allocation: when depreciation for one object is allocated to several accounts.

Based on the depreciation accumulation method, the Depreciation allocation profile (NAS) and Depreciation allocation profile (IFRS) fields are filled automatically.

To automate and standardize data filling for accounting under IFRS, in the NCA depreciation parameters catalog, create standard rules for recording depreciation and specify them for objects in the NCA depreciation parameters field. In the setting, specify the useful life, depreciation accumulation method, productivity parameters, and acceleration coefficients under the "Proportionally to output volume" method and the "Reduced balance" method. If necessary, select the depreciation cost allocation profile.

If NAS does not have a depreciation cost allocation profile and only one depreciation allocation account is specified, when you import data to the document, the Profiles of NCA depreciation expense allocation (IFRS) catalog item is created automatically. Its IFRS account is filled according to translation rules. A similar profile is created for an NAS depreciation cost allocation profile, but with several cost allocation accounts.

You can fill the Enter NCA events document manually if you need to add objects of fixed assets, intangible assets, or construction in progress that are not recorded under NAS to IFRS. To quickly fill the document manually, in the Depreciation parameters catalog, create standard rules for recording depreciation and specify them for objects in the NCA depreciation parameters field. In the setting, specify the useful life, depreciation accumulation method, productivity parameters, and acceleration coefficients under the "Proportionally to output volume" method and the "Reduced balance" method. If necessary, select the depreciation cost allocation profile.

When you post the document, NCA accounting documents are generated based on the related events recorded in the document under IFRS measurement. Entries for the Enter NCA events are not generated; instead, entries are generated for an NCA document related to the event.

To view them, click NCA documents on the command bar.

NCA component accounting

To enable component accounting, fill in the list of components for a basic NCA object. For example, if airplane is the basic NCA object, its components are engine, fuselage, and so on.

So, you can depreciate an NCA object separately from its components.

"Enter NCA information" document

To fill in data on NCA transactions of the reporting period for each object, use the Enter NCA information document.

Unlike the Enter NCA events document, in the Enter NCA information document, enter events in one line for each NCA object. So, you can enter object data as an NCA object registry, that is, record one event in the period. Apart from that, fill the document in a similar way as the Enter NCA events document.

You can enter NCA information in the following ways:

• Import data directly from the NAS integrated accounting system.
• Enter data manually by clicking Add.

When you post the document, NCA accounting documents are generated based on the objects recorded in the document under IFRS measurement. When you post the Enter NCA events document, event documents, such as NCA commissioning, are created, updated, and posted. In turn, when the event documents are posted, the related entries are generated. To view them, click Basis event documents on the command bar. To open a source document, go to Basis event documents or click Report – Linked documents – NCA information entry, Check document transfer from NAS

To open an event document, you can also right-click.

NCA receipt document

The NCA receipt document records the receipt of fixed assets, intangible assets, assets under construction, certain product range items (for example, investments in non-current assets such as equipment) in IFRS accounting.

You can fill in the document:

• Automatically, based on the accounting system data and base documents.
• Manually.

When registering an NCA receipt, specify the following information:

• NCA accounting parameters (IFRS).
• NCA addition type.
• Quantity.
• Amount (IFRS).
• Corr. account (IFRS).

Click Details to specify NAS or IFRS accounting parameters, depending on the current filling mode.

When you create the document manually, in the NCA addition type field, you can select the object receipt method from the list:

• Acquired.
• Received as a contribution to CS.
• Received under the gift contract.
• Received under the exchange contract.
• Construction (creation).
• Receipt without consideration.
• Under the lease agreement.
• Under the lease contract.
• Trust receipt.
• Contribution to joint activity.
• Restored from expenses.
• Reclassification.
• Other.

In the NCA addition type field, the receipt method is filled automatically based on the correspondent GL accounts. It happens if this NCA object is filled based on the NAS accounting system data.

For NCA register, the NCA addition type field is displayed for reference purpose only.

Unlike the Enter NCA events (information) documents, this document contains the Amount IFRS and Quantity IFRS fields. So, it is intended to record transactions of NCA investment recognition as follows: the NAS amount is filled from NAS, and the IFRS amount is filled from the NAS amount or accounting under IFRS if any adjustments were made before receipt.

When you post the Enter NCA events (information) documents, the NCA receipt document is automatically created by the Recognition NCA event. After that, you can edit the amount or date in the document.

NCA commissioning document

Use the NCA commissioning document to record transactions of commissioning of NCA objects (fixed assets, intangible assets) that are ready for use. Once you post the document, depreciation is accumulated for the NCA object.

Before you post the NCA commissioning document, register the receipt of NCA objects for the reporting period (month) under IFRS. TO do this, use the NCA receipt document.

The NCA commissioning document can be created in the IFRS accounting subsystem::

• Automatically, when posting an Enter NCA events or Enter NCA information document (using the batch input functionality). Afterwards, you can change the amount or date specified in the document.
• Manually.

To fill all document table attributes automatically, click Fill in:

• Fill in by reference documents. Fills data from the references in NAS (filling modes: NAS, NAS and IFRS), or from the NAS documents (mode: IFRS) filled on the More tab.
• Fill from accounting system. Fills data from NAS if the entity uses the transactional accounting model.
• Fill in with current NAS data. Fills NAS data from the IFRS subsystem as of the specified date. For example, GL account of initial cost.
• Fill in by NAS columns. Fills IFRS data from NAS columns. For example, UL.
• Fill in with current IFRS data. Fills IFRS data from the IFRS subsystem as of the specified date. For example, GL account of initial cost (IFRS).
• Set value in the column by the selected ones. Propagates a value, similar to Microsoft Excel.

Click Details under the document table for each NCA object and specify the following accounting parameters depending on the selected filling mode:

• GL account of initial cost (NAS, IFRS).
• GL account of depreciation (NAS, IFRS).
• Residual value for IFRS purposes. If the parameter is filled, the NCA cost for depreciation calculation will be reduced by this amount.
• Initial cost (NAS).
• Depreciation accumulation method (NAS).
• Useful life (NAS).

The following information is displayed on the More tab for reference purpose:

• Translation template. Determines a template to be used for translating the NAS accounts into IFRS accounts for a specific date, scenario, and chart of accounts.
• Base document. Generally, this is not required, with the exception of situations when you need to fill in the IFRS mode from NAS or from specific NAS documents.

After posting the NCA commissioning document:

• NCA objects are commissioned and registered in the account selected by user in this document.
• Depreciation is accrued for the NCA object since the moment of commissioning.
• The object is marked as commissioned in the NCA register.

NCA depreciation accumulation document

Use the NCA depreciation accumulation document to automatically accumulate depreciation for NCA objects under IFRS for the selected reporting period (month).

The document automatically accumulates depreciation using the depreciation method specified for the NCA class by NCA objects commissioned in accordance with depreciation accumulation algorithm defined in the IFRS settings.

To specify a depreciation accumulation algorithm that applies to all NCA objects in IFRS accounting, go to IFRS accounting – IFRS settings – Non-current assets, and select or clear the Calculate depreciation similar to NAS check box.

If:

• Calculate depreciation similar to NAS check box is selected, depreciation is accumulated on monthly basis (this option is commonly used in NAS):
  • □ Since the month following the NCA commissioning, NCA expenses renovation/capitalization, or another event.
  • □ In the disposal month, depreciation is accumulated for the entire month.
• Calculate depreciation similar to NAS is cleared, depreciation is accumulated in daily basis (this option is commonly used in IFRS):
  • □ From the registration date to the disposal date.
  • □ Depreciation for the previous period is accumulated through event documents.

A depreciation accumulation transaction is scheduled.

Before you post the NCA depreciation accumulation document, do the following in the IFRS accounting for the related reporting period (month):

• Specify the depreciation accumulation algorithm.
• Register NCA commissioning.
• Register NCA expenses renovation/capitalization.
• Register NCA objects revaluation.
• Register changes in NCA depreciation accumulation (if any) using the Change NCA parameters document. Do this to change NCA class or NCA parameters, such as useful life, depreciation accumulation method, account, business unit, Financial responsibility center, line of business, depreciation allocation group, or cost item.
• If depreciation for an NCA class is accumulated in proportion to productivity, post the Productivity document and then specify the productivity produced by this NCA object during the reporting period. As a result, the application will calculate the accumulated depreciation for the period as the ratio of the productivity for the period to the total productivity that this NCA object can potentially provide.
• Register NCA disposal.

After posting the NCA depreciation accumulation document, entries with the following information are generated:

• Account debit – for accounts specified in settings of the NCA depreciation expense allocation profile.
• Account credit – for accumulated depreciation account specified in NCA accounting parameters in NCA card in the IFRS information settings.

To view the results of accumulated depreciation by NCA objects, go to IFRS accounting – Reports – NCA register.

Reclass of NCA from expenses and inventory items document

Use the Reclass of NCA from expenses and inventory items document to capitalize expenses to NCA, reclassify NCA (for example, intangible assets) from deferred expenses, and reclassify inventory to NCA.

Expenses and inventory items that exceed the amount set by the accounting policy are automatically recognized as NCA objects if the NCA materiality threshold is specified in the IFRS accounting policy for the company.

With the document, you can also reclassify deferred expenses recognized as an asset under NAS to IFRS intangible assets, or write off deferred expenses as expenses of the IFRS period.

Before you fill in the Reclass of NCA from expenses and inventory items document, translate transactions in IFRS accounting for the corresponding reporting period (month).

The Reclass of NCA from expenses and inventory items documents can be created in the IFRS accounting subsystem, regardless of the NAS documents, using the following methods:

• Automatically, by clicking Fill in document.
• By selecting inventory objects for reclassification. To do this, click Inventory for reclass in NCA.
• Automatically, by clicking Import to import data from a Microsoft Excel form.
• Automatically, by clicking Fill in – With current data.
• Manually.

When manually filling the Reclass of NCA from expenses and inventory items document, you need to do the following:

• In the Asset source field, select an asset kind to be reclassified to NCA: a product range object, a prepaid expense, or a cost item.
• In the Account of asset, expense and Extra dimension fields, select a GL control account of the asset source to be reclassified and its analytical accounting parameters, such as an account and a cost item to reclassify from.
• In the Accounting parameters NCA field, set NCA class and NCA type to reclassify Asset source to.

An NCA type can be: fixed assets, intangible assets, investment property, biological assets, and so on. NCA class defines a subcategory within the type, such as facilities, buildings, or equipment. The respective NCA GL account and accounting model (at actual costs or at revalued cost) are linked to each NCA class.

Click More to open the following tabs: Accounting parameters, Depreciation parameters, and Recognized NCA.

The Accounting parameters and Depreciation parameters tabs are information tabs. You cannot edit them. They display the information about accounting and depreciation parameters that are predefined for the selected NCA class.

You can edit the Recognized NCA tab and use it to create several NCA objects when you reclassify several homogeneous product range objects.

For example, you need to reclassify the "Shopping trolley bag" inventory object in the amount of 2 pieces to fixed assets. Click Recognized NCA to create two different fixed asset objects with different names, useful lives, and costs.

Deferred expenses under NAS may not always be recognized under IFRS as NCA objects (intangible assets or items of construction in progress). Sometimes deferred expenses under IFRS are recognized as period expenses or as part of accounts receivable (advance payments). In this case, specify the classification algorithm for these deferred expenses in the translation settings (translation template). Set a correspondence between GL accounts of deferred expenses under NAS and GL accounts of expenses under IFRS. Also set a correspondence between GL accounts of accounts receivable and GL accounts of advance payments under IFRS. You can set these correspondences both for the account as a whole and for separate deferred expense kinds, and also for each deferred expense object.

In the accounting card of deferred expense objects, you can configure the accounting parameters for each deferred expense object: translation or parallel accounting. If you select the Parallel accounting parameter, these deferred expenses will be transferred to IFRS with the Reclass of NCA from expenses and inventory items document.

If the NCA materiality threshold is set in the company's accounting policy, the application finds all inventory objects that exceed the specified materiality threshold. For a group of these objects or a certain object, you can specify parameters for accounting under IFRS: an asset class, an account, and a depreciation method. You can also exclude an object or a group of objects from the list and do not reclassify them.

To do this, in the Reclass of NCA from expenses and inventory items document, click Inventory for reclass NCA. The window that opens will display a list of inventory items that exceed the materiality threshold. The list will contain all inventory objects, regardless of the accounting option that is selected for them (translation or parallel accounting). For the listed objects, specify parameters for accounting under IFRS, such as an NCA class, depreciation period, and so on. To exclude them from the reclassification list, click Set as do not reclass. You can also use bulk setting of accounting parameters for the list of objects.

After posting the Reclass of NCA from expenses and inventory items document, entries with the following information are generated:

• Account debit – for GL account of NCA initial cost in accordance with NCA object accounting settings (as specified on the Recognized NCA tab).
• Account credit – for GL account of expense source asset (for example, expenses on inventory items).

To view the results of registered reclassification of NCA objects, go to IFRS accounting – Reports– NCA register.

NCA renovation/expense capitalization document

The NCA renovation/expense capitalization document records renovation, further construction, and further equipping of NCA. The document can be used independently of NAS to capitalize additional expenses to assets under construction or fixed assets under IFRS.

Before you post the NCA depreciation accumulation document, do one of the following in the IFRS accounting for the related reporting period (month): either register (and commission if necessary) the NCA object planned for renovation, or capitalize the expenses to increase the NCA object's value.

The NCA renovation/expense capitalization document can be created in the IFRS accounting subsystem, regardless of the NAS documents, using the following methods:

• Automatically, by clicking Fill in. This fills the document with the accounting system data. Non-group documents can only be filled from NAS documents if their dates and times are identical.
• Manually.

When manually filling the NCA renovation/expense capitalization document, you need to do the following:

• Select an NCA object.
• Specify applicable NCA accounting parameters.
• In the Corr. account (IFRS) field, specify a GL account and analytical flags of the expense to be capitalized or the NCA object that is a source for the ongoing renovation and expense capitalization.
• Specify the renovation or expense capitalization amount for IFRS purposes.
• Specify UL for object depreciation after renovation.

Depending on the depreciation method selected for the object to be renovated, you can fill the UL after event (IFRS) field or the Output volume work quantity (IFRS) field. In these fields, specify data on the new useful life, considering the increase in this useful life after the renovation. If you set the "Proportionally to output volume" depreciation method for the object by productivity, in the Output volume work quantity (IFRS) field, specify the new output volume, which is a basis for calculating the depreciation for the renovated object after the renovation.

Click Details under the document table for each NCA object and specify the following accounting parameters depending on the selected filling mode:

• GL account of initial cost (NAS, IFRS).
• Residual value (IFRS).
• Accounting parameters (NAS) for reference purpose: GL account of initial cost, UL, renovation amount.

After posting the NCA renovation/expense capitalization document, entries with the following information are generated:

• Account debit – for GL account of NCA initial cost in accordance with NCA object accounting settings.
• Account credit – for GL account of capitalized expenses.

Also:

• NCA object expenses will be allocated to increase the initial value of NCA objects on the NCA object's GL account.
• Since the date of NCA renovation/expense capitalization, accumulated depreciation for NCA objects will be calculated using the increased NCA value.
• Renovation of the NCA object will be displayed in the NCA register report.

NCA revaluation document

Use the NCA revaluation document to revalue NCA depending on the NCA accounting model parameter selected in the NCA classes catalog card.

Before you fill in the document, make sure that the NCA object:

• Is registered under IFRS using the parallel accounting documents: Enter NCA events, Enter NCA opening balance, Enter NCA information, NCA receipt, and NCA commissioning.
• Uses the accounting model Revaluation model in NCA accounting parameters. If you set the Revaluation model for an NCA class, the document calculates positive or negative revaluation of NCA objects (revaluation surplus or downward revaluation) that belong to NCA groups accounted for at revalued cost. If you set the Accounting by actual costs model for an NCA group, these NCA objects will not be included in the document when you click Fill in.
• Has depreciation accumulated over the previous and current reporting periods. If the daily depreciation algorithm (IFRS) applies, depreciation is accumulated since the date of its recognition, and days of revaluation month are included into the accumulation period. If the monthly depreciation algorithm (NAS) applies, depreciation is accumulated since the 1st of the month following the month of recognition of fixed assets, and only the previous month and "Depreciation accumulation under IFRS after revaluation" document are included into the accumulation period.

The NCA revaluation document can be created in the IFRS accounting subsystem, regardless of the NAS documents, using the following methods:

• Automatically, by clicking Fill in document.
• Selecting NCA objects by clicking Fill in – Select.
• Manually.

When selecting an NCA object, the following information is automatically filled in for it:

• NCA accounting parameters.
• Net book value.
• Depreciation to accumulate as of the beginning of the current reporting period.

Fair value of the NCA object as of the reporting date is manually entered into the Fair value column.

The NCA object revaluation in the Initial cost revaluation column is calculated automatically as the difference between fair value and net book value. Net book value is filled based on the accounting data (when depreciation is calculated per days, Depreciation to accumulate from the document is also taken into account).

After posting the NCA revaluation document, entries are generated in accordance with user-defined NCA accounting parameters:

• NCA revaluation (revaluation surplus), with the following information:
  • □ Account debit – for GL accounts of NCA initial cost.
  • □ Account credit – for GL accounts of NCA revaluation reserve.

or

• NCA revaluation (downward revaluation), with the following information:
  • □ Account debit – for GL accounts of NCA downward revaluation.
  • □ Account credit – for GL accounts of NCA initial cost.
• NCA depreciation recovery, with the following information:
  • □ Account debit – for GL accounts of NCA revaluation reserve.
  • □ Account credit – for GL accounts of accumulated NCA depreciation specified in NCA accounting parameters by default in NCA card, section IFRS information.
• NCA depreciation accumulation for the reporting period including revaluation, with the following information:
  • □ Account debit – for GL accounts of expense from NCA depreciation.
  • □ Account credit – for GL accounts of accumulated NCA depreciation specified in NCA accounting parameters by default in NCA card, section IFRS information.

To view the results of registered revaluation and accumulated depreciation by NCA objects, go to IFRS accounting – Reports – NCA register.

NCA impairment document

Use the NCA impairment document to impair CGU (cash-generating units) in accordance with IFRS (IAS) 36 and allocate the impairment amount to NCA objects (fixed assets, intangible assets, inventory, products, assets under construction) included in CGU.

The NCA impairment document can be used with either of the NCA accounting models:

• Revaluation cost.
• Initial cost (by actual costs).

Before you fill in the NCA impairment document, make sure that the NCA object:

• Is registered under IFRS using the parallel accounting documents as described above.
• Has filled in GL accounts of impairment under the corresponding accounting model in NCA accounting parameters.

The NCA impairment document can be created in the IFRS accounting subsystem, regardless of the NAS documents, using the following methods:

• Automatically, by clicking Fill in with current data (IFRS).
• Selecting NCA objects by clicking Select.
• Manually, by clicking Add.

When you fill the document:

• First, go to the NCA, allocation objects tab and select NCA objects. The following information will be automatically populated for the selected objects:
  • □ NCA accounting parameters.
  • □ Net book value.
• Next, go to the Impairment calculation tab and enter the following CGU information:
  • □ CGU fair value.
  • □ CGU sale expenses.
  • □ CGU value in use.
• Then, the greatest amount of fair value minus sales expenses and value in use is automatically determined, and impairment is calculated.
• The amount of Impairment of initial cost is to be allocated to all NCA objects included in CGU. This is done using the Allocate among NCA function, for CGU components.

The impairment loss is allocated in proportion to the net book (residual) value of the objects included in the cash-generating units.

To select objects included in cash-generating units, on the NCA, allocation objects tab, click Select.

You can select objects of a certain NCA class or objects located in a certain place. You can also use other filter conditions.

When the NCA impairment document is posted, entries are generated as per the user-configured "Accounting parameters" of the NCA object to reflect its depreciation, indicating the following:

• Account debit – for GL accounts of NCA impairment.
• Account credit – for GL accounts of accumulated NCA impairment.

To view the results of registered impairment by NCA objects, go to IFRS accounting – Reports – NCA register.

NCA disposal document

Use the NCA disposal document to record the disposal of NCA objects in case of their sale, write-off, or full or partial disposal.

Before you fill in the NCA disposal document, make sure that the NCA object:

• Is registered under IFRS using the parallel accounting documents: Enter NCA events, Enter NCA opening balance, Enter NCA information, NCA receipt, and NCA commissioning.
• Has depreciation accumulated in accordance with the applicable depreciation accumulation algorithm.

If:

• Calculate depreciation similar to NAS check box is selected, depreciation is accumulated on monthly basis (this option is commonly used in NAS):
  • □ Since the month following the NCA commissioning, NCA expenses renovation/capitalization, or another event.
  • □ In the disposal month, depreciation is accumulated for the entire month.
• If the Calculate depreciation similar to NAS is cleared, depreciation is accumulated in daily basis (this option is commonly used in IFRS):
  • □ From the registration date to the disposal date. Therefore, it is not necessary to accumulate NCA depreciation before disposal in the month of disposal.

Common methods of creating the NCA disposal document:

• Using the Enter NCA events document with the NCA disposal operation kind. Use this method when disposal of the NCA object under IFRS and NAS is identical.
• Manually. Use this method if you need to specify different disposal dates under IFRS and NAS.

The NCA disposal document can be created in the IFRS accounting subsystem, regardless of the NAS documents, using the following methods:

• Automatically, by clicking Fill in with current data, Fill in by base documents, Fill in from accounting system, Fill in with current data (NAS), Fill in with current data (IFRS), Fill in by columns NAS, or
• Manually, by clicking Add.

When you fill the NCA disposal document, select the following:

• NCA object.
• Transaction type.
• Expense account (NAS).
• Expense account (IFRS).
• base document on the More tab.

NCA object from the IFRS accounting subsystem is displayed in the NCA field. It is assumed that the same disposal date of the NCA object is used under both IFRS and NAS.

In the Partial disposal (NAS, IFRS) field, select the check box if a fixed asset part is dismantled or sold. Partial disposal is available only if the Calculate depreciation similar to NAS check box is cleared in the IFRS accounting parameter settings.

To fill all the above fields automatically, click Fill in to use the accounting system data.

If a fixed asset is disposed of, the system automatically writes off the initial cost and accumulated depreciation on the disposal date to the GL account of the financial result from the fixed asset disposal. If the disposal date and the date of the last depreciation accumulation document (recorded as of the last day of each month) do not match, the NCA disposal document adds depreciation from the beginning of the month to the disposal date.

If a fixed asset is disposed of partially, in the NCA disposal document, enter the initial cost of the part to be disposed of. The system will automatically calculate the accumulated depreciation attributable to the withdrawal part of the fixed asset in proportion to the withdrawal share of the initial cost.

Disposal parts of the initial cost and accumulated depreciation are written off from their GL accounts to the GL account of the financial result from the fixed asset disposal.

In the month of the partial disposal, the fixed asset is depreciated at its new initial cost that is adjusted for partial disposal during the previously specified useful life. Depreciation is calculated by days from the date of partial disposal to the end of the month.

Sometimes partial disposal of a fixed asset is confused with its division into components and subsequent disposal of one of the components. In this case, it is necessary to record the complete object disposal and create new inventory items for accounting. In this case, the treatment will be the same as under NAS since this object will be dismantled according to national standards.

Partial disposal under IFRS is used when an object cannot be divided into components. However, there is a significant decrease in the object value and there is a need for its overhaul due to any emergency situations. In this case, accounting under NAS and accounting under IFRS may be different. It depends on how and when the downward revaluation of a fixed asset under NAS is recorded, since physical inventory count is required to confirm the downward revaluation. Its time is not always the same as the time when reports under IFRS are prepared.

In the Transaction type field, select Sale or Write-off.

If you translate NAS data on NCA to the IFRS subsystem, the Expense account (NAS, IFRS) field automatically displays the "Profit and loss statement" accounts. These accounts record the write-off of the NCA net book value upon write-off.

After posting the NCA disposal document, entries are generated in accordance with user-defined NCA accounting parameters:

• NCA initial cost disposal, with the following information:
  • □ Account debit – for GL account of income/expense from NCA disposal.
  • □ Account credit – for GL accounts of NCA initial cost disposal.
• NCA accumulated depreciation disposal, with the following information:
  • □ Account debit – for GL account of disposal of depreciation accumulated for NCA object.
  • □ Account debit – for GL account of income/expense from NCA disposal.

To view the results of registered disposal of NCA objects, go to IFRS accounting – Reports – NCA register.

Change NCA parameters document

Use the Change NCA parameters document to record a change in semi-fixed details of an NCA object.

Use this document to change the following NCA accounting parameters:

• NCA class.
• NCA depreciation parameters

NCA class may change due to a change in management's intentions regarding the purpose of non-current asset usage. For example, management may start using a fixed asset (building) as an investment property.

Depreciation parameters may change in the following cases:

• Change in management's intentions regarding the purpose of non-current asset usage.
• Change in useful life of fixed assets or intangible assets.
• Changes in power, performance, and other technical characteristics of a fixed asset.
• Changes in the depreciation expense allocation profile, including its components: cost GL accounts, cost items, product range group, business unit (if any), Financial responsibility center, line of business.

Before you fill in the Change NCA parameters document, check whether the NCA object is recorded in IFRS accounting using parallel accounting documents described above, including the case when NCA object comes as right-of-use asset on leasing terms or reclassified from the expenses and inventory items.

The Change NCA parameters document can be created in the IFRS accounting subsystem, regardless of the NAS documents, using the following methods:

• Automatically, by clicking Fill in by base documents, Fill in from accounting system, Fill in with current data, Fill in by columns NAS, or
• Manually, by clicking Add.

When you fill the Change NCA parameters document, depending on the filling mode, select the following:

• NCA object.
• Current parameters of NCA accounting under IFRS.
• New parameters of NCA accounting under IFRS.
• New parameters of NCA depreciation under IFRS.
• Depreciation allocation profile (NAS).
• Useful life (NAS).
• Depreciation allocation profile (IFRS).
• Useful life (IFRS).

Click More to fill the following information:

• Depreciation accumulation method (NAS).
• Depreciation accumulation method (IFRS).
• Residual value (IFRS).
• Financial responsibility center.
• Line of business.

If a Base document is available, specify it on the More tab.

After posting the Change NCA parameters document, entries are not generated; instead, changes made to settings of NCA objects are recorded.

NCA productivity document

Use the NCA productivity document to enter productivity indicators for the current month of NCA objects whose depreciation is accumulated in proportion to the productivity.

Before you fill in the NCA productivity document, check whether the NCA object is recorded in IFRS accounting using parallel accounting documents.

The NCA productivity document can be created in the IFRS accounting subsystem, regardless of the NAS documents, using the following methods:

• Automatically, by clicking Fill in by base documents, Fill in from accounting system, Fill in with current data, Fill in by columns NAS, or
• Manually, by clicking Add.

When you fill the NCA productivity document, depending on the filling mode, select the following:

• NCA object..
• Productivity parameter.
• NAS quantity.
• IFRS quantity.

In this document, you can automatically select NCA with the appropriate Depreciation method.

You can use depreciation accumulation in proportion to productivity for different NCA types: fixed assets and intangible assets.

Calculate depreciation in proportion to productivity as follows:

V / RVN, where V – productivity amount during the current month; RVN – productivity volume.

Productivity amount and productivity volume are set in units specified in the output parameter. For example, the output of a grader can be measured in operating hours, square meters of the processed area or liters of fuel consumed.

Productivity amount is specified in the productivity documents for the month. Enter documents to the IFRS system every month. Otherwise, zero productivity values will be used for the month when the corresponding document was not entered.

Productivity volume is specified in the Enter NCA or Change NCA parameters documents.

After posting the NCA productivity document, entries are not generated; instead, monthly productivity parameters for NCA objects that have depreciation accumulating in proportion to productivity are recorded.

List of reports dedicated to NCA accounting under IFRS

The following tools are available for analyzing NCA accounting under IFRS:

• IFRS trial balance drill-down.
• Drilled-down registers for report instance of trial balance under IFRS, including:
  • □ NCA register.
  • □ NCA movement.
  • □ Universal report.
  • □ Entry translation reconciliation.
  • □ Check document transfer from NAS.

Use the NCA register report to analyze NCA information. It displays NCA accounting and depreciation parameters, opening and closing balance at initial cost and net book value, accumulated depreciation, and turnovers for the period broken down by NCA events.

You can open the NCA movements report from any parallel accounting document. The report shows all information about the NCA objects included in the document. The information records an NCA state on the document date: initial cost, accumulated depreciation, revaluation, impairment, useful life, depreciation parameter, and so on.

Use the Universal report to see information on NCA GL accounts in the format of accounting registers: Trial balance for account, Account analysis, Transaction log, and other report.

To reconcile NCA parallel accounting data, use the following reports:

• Entry translation reconciliation.
• Check document transfer from NAS.

Since the objects of parallel accounting are not included in the translation document, their amount is displayed in a separate NCA column of the Entry translation reconciliation report.

To transfer the transaction amounts displayed in the NCA column to the IFRS accounting registers, post the Enter NCA events document and fill it automatically based on NAS data.

To generate the Check document transfer from NAS report, open a parallel accounting document and click More.

Use the Check document transfer from NAS report together with the Entry translation reconciliation report. It allows you to reconcile the integrity of transferring "Non-translated amounts of the parallel accounting objects" from NAS, whose translation requires the Enter NCA events document.

For example, parallel accounting of a fixed asset means that it should be recognized with different parameters under IFRS. A situation may occur when you forget to post the Enter NCA events document and recognize a fixed asset under IFRS, or delete a fixed asset from the document manually because you thought that the fixed asset should not be recognized under IFRS.

To analyze the history of changes in the cost of NCA objects, use the NCA movements report. Use the report to decompose the change in the cost of each NCA object into components and track all changes up to the document. Use the report to see how the useful life and the amount of accumulated depreciation change if a fixed asset is renovated and subsequently impaired. You can also use the report to analyze changes in depreciation expenses. For example, you can compare the amount of accumulated depreciation before impairment and after it. In case of renovation, you can also see that the depreciation rate changes after the object renovation.

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