- Feature
- Consistent reporting currency for asset splits
- Availability
- Generally available in Finance 10.0.49 (enhancement)
- Industry focus
- Real estate and property companies
Property portfolios change shape constantly. A building is divided into separately let units, a site is partly sold, a mixed-use development is separated into residential and commercial components. In the fixed asset register, that often means splitting one asset into several, and for international property groups it means doing so in two currencies.
The industry challenge
Many real estate groups hold assets in one currency and report in another, for example properties across Europe held by a group reporting in pounds sterling or US dollars. Dynamics 365 Finance can maintain fixed asset values in both accounting currency and reporting currency.
When an asset is split, the original cost and accumulated depreciation are divided across the new assets. If the reporting currency amounts for the new assets are recalculated at a different exchange rate rather than carrying the original one, the totals no longer match the original asset in reporting currency. Small differences appear, and over a large portfolio they add up.
Finance teams then have to post correcting entries and explain the differences in reconciliations. For property companies whose balance sheets are dominated by asset values, and whose investors and lenders scrutinize those values, that is unwelcome noise.
What Microsoft delivered in Finance 10.0.49
Finance 10.0.49 ensures that when a fixed asset is split, the resulting assets carry the original exchange rate for the reporting currency. The reporting currency values of the new assets add back to the original, consistent with the accounting currency treatment.
This enhancement removes a source of unexplained differences rather than adding new process steps.
Where the value shows up
| Business area | Impact |
|---|---|
| Asset accounting | Split assets reconcile to the original in both currencies |
| Group reporting | Fewer currency differences arising from portfolio restructuring |
| Close effort | Less time spent posting and explaining correcting entries |
| Investor and lender reporting | Cleaner asset values in reporting currency |
| Audit | Simpler reconciliation between the original and resulting assets |
A worked scenario
(An illustrative example.) A property investment company reporting in sterling owns an office building in Germany, recorded as one asset in euros. It refurbishes the building and divides it into three separately let floors, splitting the asset accordingly.
Previously, the reporting currency values of the three new assets might not have added up to the original asset's sterling value, leaving the finance team to investigate and correct the difference. After the update, each new asset carries the original exchange rate, the sterling values reconcile exactly, and the restructuring passes through the close without a reconciliation query.
Adoption considerations
- Review past splits. Assets split before the update may still carry differences. Decide whether to correct them.
- Confirm reporting currency set-up. Check exchange rate types and reporting currency configuration for your property entities.
- Update procedures. Make sure your asset split process reflects the new behaviour and removes manual correcting steps.
- Test representative cases. Try splits with partial depreciation, revaluations and impairments in a sandbox.
- Coordinate with valuations. If properties are revalued, check how splits and revaluations interact in reporting currency.
The bottom line
For property companies, the fixed asset register is the business. Keeping the original exchange rate when assets are split removes a long-standing source of reporting currency differences and makes portfolio restructuring cleaner. It is a quiet enhancement with a clear benefit for multinational property groups. Review your asset processes with an experienced Dynamics 365 Finance adviser to make the most of it.
Source: Microsoft: What's new or changed in Dynamics 365 Finance 10.0.49