Real Asset Management (RAM) Asset4000 software journal configuration

A client was struugling with journal configuration in Asset4000 - they just couldn't seem to get the debits and credits right for journals to deal with revaluation of non-current assets. 

Revaluation journals refer to four RAM database fields to generate the journal entries.

The fields are:

• GCRC Alteration
• Acc Depn Alteration
• MHCA Charge to Reval Reserve
• MHCA Charge to Impairment Reserve

It is important to understand that the signed figures contained in these fields do not consistently reflect the accounting significance of the figures.  For example, when an asset is indexed upwards the accounting entries will be Dr Cost or Valuation and Cr Acc Depn (i.e. opposite accounting significance) but both the GCRC Alteration and Acc Depn Alteration fields will contain figures with the same signage.

The Dr and Cr radio button options on the journal configuration screen do not actually mean debit and credit.  Rather, Dr means “attribute accounting significance to the figure held in the underlying database column and use that figure unadjusted” (where a positive figure is a debit and a negative figure is a credit), whilst Cr means “flip the sign on the figure held in the underlying database column and attribute accounting significance to the adjusted figure”.

The following table shows the effect of the variable signage of the database columns and the implications for the appropriate radio button settings:

Database Column	+ve figure in the database column represents a	Revaluation up of IR asset would be recorded as	When configured with a	Accounting result
GCRC Alteration	Dr	+	“Dr”	Dr
Acc Depn Alteration	Cr	+	“Cr”	Cr
MHCA Charge to Reval Reserve	Cr	+	“Cr”	Cr
MHCA Charge to Impairment Reserve	Dr	-	“Dr”	Cr

Database Column	+ve figure in the database column represents a	Revaluation down of RR asset would be recorded as	When configured with a	Accounting result
GCRC Alteration	Dr	-	“Dr”	Cr
Acc Depn Alteration	Cr	-	“Cr”	Dr
MHCA Charge to Reval Reserve	Cr	-	“Cr”	Dr
MHCA Charge to Impairment Reserve	Dr	+	“Dr”	Dr

Consequently, for all journal configurations, it is important to determine the meaning of signed column contents before it is possible to determine whether it should be configured as “Dr” or “Cr” to achieve the correct accounting output.

Another observation concerning the journal configuration screen is that the Balance Sheet and Profit & Loss radio button options have no accounting significance and could just as easily be renamed as Matrix Set 1 and Matrix Set 2.