Enterprises often transfer assets between legal entities to reflect both real-world and financial optimization. Starting with 25B, you can transfer assets between asset books linked to the same ledger. From 25C you can transfer assets across asset books belonging to different ledgers.
In this post we highlight the key aspects of the two features.
Transfer assets between asset books that belong to the same ledger
You can select between two transfer methods:
- Gross Method: Assets records the asset transfer as a transfer-out transaction in the source book and as a unique transfer-in addition in the destination book.
- Net Book Value Method: Assets treats the asset transfer as a related party sale. It records the transfer as a specific book transfer retirement transaction in the source book and as a unique transfer-in addition in the destination book.
When you transfer an asset, you can select between the cost basis types below. This choice determines the cost and accumulated depreciation in the destination book:
- Cost and Reserve of the source asset: Assets initializes the destination asset with the cost and reserve amount of the source asset.
- Net book value of the source asset: Assets initializes the destination asset cost with the net book value of the source asset. It initializes the depreciation reserve as zero.
The transfer method differs from the cost basis type.
The transfer method controls the type of transactions the system will record, either transfer out / transfer in for Gross Method, or retirement / addition for Net Book Value Method.
The cost basis determines the valuation (asset cost and depreciation reserve) of the asset in the destination book.
An asset transfer can be done mid-period but the depreciation reserve is calculated as of the period prior to the transfer period for the Gross Method. For the Net Book Value Method, you can use the retirement prorate convention to calculate the Net Book Value and Depreciation Reserve, which will then determine the valuation in the destination book.
Asset transfers between asset books that belong to different ledgers
You can transfer assets using the Net Book Value Method only. This is because the asset transfer is treated as a related party sale.
When you transfer an asset, you can select between the following cost basis types below. This choice determines the cost and accumulated depreciation in the destination book.
- Cost and reserve of the source asset: Assets initializes the destination asset with the cost and reserve amount of the source asset.
- Net book value of the source asset: Assets initializes the destination asset cost with the net book value of the source asset. It initializes the depreciation reserve as zero.
- Transfer amount: Assets initializes the destination asset cost with a user-entered transfer amount. It initializes the depreciation reserve as zero.
An asset transfer can be done mid-period. For the Net Book Value Method, you can use the retirement prorate convention to calculate the Net Book Value and Depreciation Reserve, which will then determine the valuation in the destination book.
When you transfer assets from one book to another across different ledgers, the application generates independently balanced accounting entries in the source book to close out asset balances. It also generates a separate set of balanced entries in the destination book to initiate the opening balances.
Source Book Accounting
| Date | Event | Class | Accounted Debit (USD) | Accounted Credt (USD) |
|---|---|---|---|---|
| 7/31/25 | Book Transfer | NBV Retired | 16,133.33 | |
| 7/31/25 | Book Transfer | Cost | 22,000.00 | |
| 7/31/25 | Book Transfer | Accounts Receivable | 16,133,33 | |
| 7/31/25 | Book Transfer | Accumulated Depreciation | 5866.67 | |
| 7/31/25 | Book Transfer | Proceeds of Sale | 16,133,33 | |
| Total | 38,133,33 | 38,133,33 |
Destination Book Accounting
The asset in the destination book was created with a cost of $16,133.33 and zero depreciation reserve using Net Book Value of the source asset as the cost basis.
| Date | Event | Class | Accounted Debit (USD) | Accounted Credt (USD) |
|---|---|---|---|---|
| 7/31/25 | Book Transfer | Cost | 16,133,33 | |
| 7/31/25 | Book Transfer | Accounts Payable | 16,133,33 | |
| Total | 16,133,33 | 16,133,33 |
When you transfer an asset between primary books with different currencies, you must provide a currency conversion rate. The application uses currency conversion rate to convert the amount from the source book’s currency to the destination book’s currency.
You can copy descriptive flexfield values and decide on depreciation derivation for the newly transferred asset. Those are based on settings you select at time of the asset transfer. Depreciation rules such as depreciation method, life, and depreciation convention can be transferred to the destination asset. However, the source asset depreciation history, such as depreciation amount, cannot be transferred to the destination asset.
Note: You can also automatically transfer assets between asset tax books belonging to different ledgers. The only exception is where one source asset corporate book has a certain number of tax books which differ from the tax books assigned to the destination asset corporate book. For example: The source US asset corporate book has four tax books assigned but the destination UK asset corporate book has only one tax book assigned. In this case, you must manually retire assets in three of the four US tax books. This assumes, that you want to transfer the asset from one of the US tax books to the UK’s single tax book.
Audit Trail
The asset lifecycle history is retained in the source asset book.
The application transfers only the valuation, not the source history, to the asset destination. However, there is an audit trail back to the source asset. The access to that source asset data is dependent on the data access security granted to the user.
Check out 25B Asset Transfer to Another Book and 25C Asset Transfer to Another Book Across Ledgers to gain further insight.
To understand best practices for asset transfers between books, review the Guidelines for Transferring Assets from One Book to Another in Using Assets guide.
Conclusion
You can:
- Streamline asset management through seamless asset transfer between asset books across different ledgers.
- Generate intercompany entries automatically.
- Ensure continuity and accuracy by transferring descriptive and depreciation details to the newly transferred asset.
- Eliminate manual retirement and addition transaction entry in separate asset books.
- Enhance efficiency, reduce errors due to manual interventions, and review audit trails.