Glossary
Terminology and definitions used in AssetVault and asset management.
A
Accelerated Depreciation
Depreciation method that recognizes higher expenses in early years of asset life. Example: Reducing balance method.
Accumulated Depreciation
Total depreciation expense recognized to date since asset acquisition. Increases each period until asset is fully depreciated.
Amortization
Similar to depreciation, but typically used for intangible assets (patents, copyrights) or lease liabilities. In lease accounting, refers to reduction of lease liability over time.
Asset ID
Unique identifier assigned to each asset in AssetVault. Format: AV-0001, AV-0002, etc. Cannot be changed after creation.
Asset Register
Complete list of all assets owned or leased by an organization. Also called Fixed Asset Register.
Asset Type
Category of asset (IT Equipment, Vehicles, Furniture, etc.). Used for grouping and reporting.
B
Book Value
See Net Book Value (NBV).
Bulk Upload
Feature allowing import of multiple assets simultaneously using Excel template. Supports 100+ assets per upload.
C
Carrying Value
Current value of asset on balance sheet. Same as Net Book Value (NBV).
Capital Allowances
Tax depreciation in UK. May differ from accounting depreciation. AssetVault calculates accounting depreciation only.
Component Depreciation
Depreciation of significant parts of an asset separately (e.g., building roof vs. structure). Future enhancement in AssetVault.
Cost
Original purchase price or acquisition cost of an asset. Includes purchase price, delivery, installation, and other costs necessary to make asset ready for use.
Current Assets
Assets expected to be used or sold within one year. AssetVault focuses on fixed (non-current) assets.
D
Declining Balance
See Reducing Balance.
Depreciation
Systematic allocation of asset cost over its useful life. Reflects consumption of economic benefit.
Depreciation Expense
Amount recognized as expense in income statement each period.
Depreciation Method
Algorithm for calculating depreciation. AssetVault supports Straight-line and Reducing balance.
Depreciation Rate
Percentage used in reducing balance method. Calculated based on useful life and residual value.
Depreciation Schedule
Table showing period-by-period depreciation from acquisition to full depreciation. Includes opening NBV, depreciation, closing NBV.
Dismantling Costs
Estimated cost to remove or restore asset at end of useful life. Included in initial measurement of ROU assets under IFRS 16.
Disposal
Removal of asset from register when sold, scrapped, or retired. Triggers gain/loss calculation.
Disposal Proceeds
Amount received from sale of disposed asset.
E
Effective Interest Method
Technique for calculating interest expense on lease liability. Interest = Opening Balance × IBR.
ERP (Enterprise Resource Planning)
Business management software (e.g., SAP, Oracle). AssetVault exports data for ERP integration.
F
Fair Value
Market value of asset if sold. AssetVault uses historical cost model, not fair value.
Finance Lease
Lease that transfers substantially all risks and rewards of ownership. Under IFRS 16, most leases create ROU assets.
Fixed Asset
Long-term tangible asset used in operations (property, equipment, vehicles). Expected life > 1 year.
Fully Depreciated
Asset whose net book value equals residual value. No further depreciation calculated.
G
Gain on Disposal
When disposal proceeds exceed net book value. Recognized as income.
GDPR (General Data Protection Regulation)
EU privacy law protecting personal data. AssetVault is GDPR compliant.
Gross Book Value
Original cost of asset. Remains unchanged unless revalued or impaired.
I
IBR (Incremental Borrowing Rate)
Interest rate used to discount lease payments when implicit rate unknown. Represents rate lessee would pay to borrow funds to purchase similar asset.
IFRS 16
International accounting standard for leases. Requires lessees to recognize ROU assets and lease liabilities for most leases.
Impairment
Reduction in asset value due to damage, obsolescence, or market conditions. Reduces carrying value and future depreciation.
In-Service Date
Date asset begins to be used. Depreciation typically starts on purchase date.
Intangible Asset
Non-physical asset (software, patents). AssetVault focuses on tangible fixed assets.
J
Journal Entry
Accounting record of transaction. AssetVault generates depreciation and disposal journals.
L
Lease
Contract conveying right to use asset for a period in exchange for payments.
Lease Commencement Date
Date lessee can begin using leased asset. ROU asset and liability recognized on this date.
Lease Liability
Present value of future lease payments. Obligation under IFRS 16.
Lease Payment
Amount paid to lessor for right to use asset. May be monthly, quarterly, or annually.
Lease Term
Period lessee has right to use asset. Includes non-cancellable period plus periods covered by extension options reasonably certain to be exercised.
Lessee
Party that leases asset from another (tenant, renter).
Lessor
Party that owns asset and leases it to another (landlord).
Loss on Disposal
When disposal proceeds are less than net book value. Recognized as expense.
Low-Value Exemption
IFRS 16 allows leases of low-value assets (≤£5,000 when new) to be expensed without ROU asset.
N
NBV (Net Book Value)
Current carrying value of asset. Calculated as: Cost - Accumulated Depreciation. Also called Book Value or Carrying Value.
Nominal Value
See Residual Value.
Non-Current Asset
Asset expected to provide benefit for more than one year. Includes fixed assets.
O
Operating Lease
Pre-IFRS 16 term for leases that didn't transfer ownership. Under IFRS 16, most operating leases now create ROU assets.
Owned Asset
Asset purchased and owned by organization (not leased).
P
Present Value (PV)
Today's value of future cash flows, discounted at appropriate rate. Used to calculate lease liability and ROU asset.
Pro-Rata Depreciation
Partial period depreciation based on actual days/months owned. Used for mid-year purchases.
Purchase Date
Date asset acquired. Depreciation starts on this date.
R
Reducing Balance
Depreciation method applying constant rate to declining book value. Higher depreciation in early years.
Residual Value
Expected value of asset at end of useful life. Also called Salvage Value or Scrap Value.
Revaluation
Adjusting asset to fair value instead of depreciated cost. Future enhancement in AssetVault.
Right-of-Use (ROU) Asset
Asset representing lessee's right to use leased property under IFRS 16.
S
Salvage Value
See Residual Value.
Scrap Value
See Residual Value.
Short-Term Lease
Lease with term ≤ 12 months. Can be expensed under IFRS 16 without ROU asset.
Straight-Line Depreciation
Depreciation method allocating equal expense each period. Most common method.
Subsequent Measurement
Accounting for asset after initial recognition. Includes depreciation, impairment, revaluation.
T
Tangible Asset
Physical asset (equipment, vehicles, buildings). Contrast with intangible.
U
Useful Life
Estimated period asset will provide economic benefit. Used to calculate depreciation. Measured in years.
V
Variable Lease Payments
Lease payments that vary based on index, rate, or usage. Only fixed portion included in initial lease liability.
W
Written-Down Value (WDV)
See Net Book Value (NBV).
Acronyms
ASC 842 - US GAAP lease accounting standard (equivalent to IFRS 16)
DR - Debit (journal entry)
CR - Credit (journal entry)
ERP - Enterprise Resource Planning
FRS 102 - UK accounting standard for fixed assets
GAAP - Generally Accepted Accounting Principles
GDPR - General Data Protection Regulation
IBR - Incremental Borrowing Rate
IFRS - International Financial Reporting Standards
IFRS 16 - International standard for lease accounting
IT - Information Technology
NBV - Net Book Value
PV - Present Value
ROU - Right-of-Use (asset)
UK GAAP - UK Generally Accepted Accounting Principles
WDV - Written-Down Value
Related Documentation
- Getting Started - New user guide
- Fixed Assets - Asset management details
- Depreciation Engine - Depreciation concepts
- Lease Engine - IFRS 16 terminology
- FAQ - Common questions
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