Assigning a distinct depreciation method, rate, and useful life to each asset according to its attributes and anticipated economic value consumption is known as asset-specific depreciation. In this blog, we’ll discuss how to perform single asset depreciation with Tvarana’s new solution that is built on NetSuite’s Fixed Assets Management (FAM) module. In this article, we’ll explore why businesses need Asset Specific Depreciation, current challenges, how Tvarana’s solution bridges the gap.
5 Scenarios in Which Businesses Need Asset Specific Depreciation
In many businesses, finance teams often need the flexibility to run depreciation on a specific asset, rather than on an entire group of assets. However, NetSuite’s Fixed Assets Management (FAM) module currently supports only bulk depreciation, which limits how asset-level events can be handled.
Below are common business scenarios where single-asset depreciation becomes essential:
- Asset Disposal (Write-Off/Sale)
- When an asset is disposed of, depreciation should be calculated up to the disposal date.
- This ensures the asset’s Net Book Value (NBV) is accurate before it is cleared from the books.
- Employee Exit
- When an employee leaves the organization, assets assigned to them (e.g., laptops, vehicles, or other electronic devices) must be depreciated up to the employee’s leaving date.
- This ensures Finance can accurately reconcile and clear the assets from the financial records, with depreciation calculated at the individual asset level, especially when the asset is sold or returned.
- Asset Revaluation (Written Down/Up)
- Before revaluing an asset, depreciation needs to be processed up to the period preceding the revaluation.
- To ensure the revaluation is applied to a correctly depreciated balance.
- Asset Transfer
- For transfers between classifications or asset types, depreciation must be run up to the period prior to transfer to maintain accuracy in accounting.
- Asset Split
- When a single asset is split into multiple assets, depreciation must be calculated up to the split date so that each resulting asset inherits the correct opening balance.
Current Limitations in NetSuite Fixed Asset Management Module
The NetSuite Fixed Asset Management module provides only bulk depreciation. To handle specific asset-level cases, finance teams must currently:
- Run depreciation in bulk for the entire asset classification, up to the required period.
- Perform the asset-level action (such as revaluation, transfer, disposal, or split).
This adds complexity and increases the risk of errors.
Consider an employee named Christen who is leaving the organization. As per company policy, departing employees may retain their assigned laptop by paying its current asset value. In this situation, Finance must depreciate Christen’s laptop up to the employee’s leaving date, determine the remaining value, and then clear the asset from the books.
However, since NetSuite does not support single-asset depreciation, the Finance team cannot process only Christen’s laptop. Instead, they are required to run depreciation for all assets within the same laptop category and entity that Christen belongs to, even though the adjustment is needed for just one asset.
How Tvarana bridged this gap with its solution
With Tvarana’s custom solution, finance teams can now achieve the following:
- Run depreciation directly for a single asset
- Generate depreciation history
- Create journal entries automatically with a single click.
- Update asset records in sync with NetSuite logic
- Maintain data accuracy and consistency across financials
By extending NetSuite’s FAM, our solution ensures reliability, maintains accuracy, and brings much-needed flexibility to fixed asset management.
FAQs on FAM
- What is asset-specific depreciation?
Asset-Specific Depreciation is the process of depreciating an individual asset rather than all assets in a group.
- Why do businesses need asset-specific depreciation?
Organizations require asset-specific depreciation to handle asset-level financial events such as disposals, revaluations, or employee exits. It allows finance teams to post depreciation precisely up to the event date, improving accuracy and compliance in asset accounting.
- How is asset-specific depreciation different from bulk depreciation?
Bulk depreciation applies to a uniform calculation across an entire asset class or category. In contrast, asset-specific depreciation isolates the calculation to a single asset, enabling targeted adjustments without impacting other assets within the same classification.
- What are the challenges in NetSuite’s Fixed Assets Management (FAM) module?
NetSuite’s standard FAM module currently supports only bulk depreciation processing. This restricts finance teams from executing depreciation for individual assets, requiring full-classification depreciation runs even when adjustments are needed for a single Asset.
- How does Tvarana’s solution help with asset-specific depreciation?
Tvarana’s customized solution extends NetSuite’s FAM functionality by enabling depreciation runs at the individual asset level. It automatically generates depreciation history and journal entries while maintaining synchronization with NetSuite’s FAM accounting logic.
- Is Tvarana’s solution built on NetSuite’s standard features?
Yes. The solution is embedded with NetSuite’s native FAM framework.
