In the business world, companies are bought and sold all the time. So what are some common JD Edwards activities to undergo when your company is acquired? In our years of experience, we’ve helped a number of customers get through this transition period smoothly and successfully. Here are a few things we’ve done to help those clients bring their newly-acquired JD Edwards systems up to speed.
Changing the Fiscal Year End
When one of our clients was acquired by a larger company, they had to adjust to the parent company’s fiscal year, changing from a June 30 fiscal year end to December 31.
JD Edwards has a process to change the fiscal year for the trial balance in the General Ledger, and our team followed that process to update the GL. However, the change in fiscal year affected our clients Fixed Assets as well, and JD Edwards does not have an inherent process to change the fiscal year of Fixed Assets.
In order to keep the integrity between Fixed Assets and the General Ledger, our team had to go into our client’s JDE software to realign the periods in Fixed Assets with the revised periods in the GL. Our team wrote custom code to shift everything in the Fixed Assets balance file by six months so that it would match with the client’s new fiscal year.
Our custom solution was a two-step process: the first step involved making changes to the JD Edwards system configuration including reviewing and revising depreciation rules as needed, and the second was behind the scenes to move the data in the balance file, which required the custom programs.
By working with our team, our client was able to leverage their existing JD Edwards capabilities in order to resolve this fiscal year end change. While some custom coding was required, no new software needed to be implemented, and the entire process was minimally disruptive of day-to-day business. Now, our client’s fiscal year matches that of their parent company, and they are set up for success.
Fixed Assets Revaluation
Typically, when a company is acquired, it will undergo a revaluation of its fixed assets. If you’re a company running JD Edwards, specifically the fixed assets module, then this revaluation may not happen the way you want it to.
When using the base JDE functionality, implementing a revaluation of fixed assets will simply replace the old value of the items, as opposed to allowing you to view both the pre- and post-acquisition values of the items. When one of our clients was acquired, their fixed assets went under a revaluation that ended up requiring a custom solution to maintain the desired information.
This client’s fixed assets were on the books at a certain price point and they depreciated in value annually. When the acquisition happened, an appraisal was completed for their fixed assets, which valued them at a different amount than what our client had on the books in JD Edwards. The client needed to update the fixed assets value in JD Edwards, but they wanted to maintain the historical value as well. Because JD Edwards has no method for changing a fixed asset value while maintaining historical visibility, our client turned to our JD Edwards team to come up with a custom solution.
Using our JDE Business Processes experience, our team took the existing asset records affected by the revaluation, lifted them out of JDE, then copied and reloaded them as identical, new assets. The new, copied assets were assigned the new value. The old records were assigned an “RV” status, which indicated that those items had been revalued and were to be ignored in future changes.
Using this solution, our client still has all of their fixed assets information as it was at the date of the acquisition, as well as a new set of assets that have been updated and are now being used in JD Edwards. The new depreciation amounts are being calculated on the new fixed assets values, but the client still has the old records for historical purposes.
This solution was crucial for our client as they did not want to lose visibility of the historical valuation of their assets, as they would have with the recommended JD Edwards process. Our method simply enhanced the JDE process so that the client can have visibility into and cross-reference what prices were pre-acquisition, and what they are now.
These are just a few of the ways we’ve helped clients through the acquisition process. It can be a challenging time to be sure, which is why it’s helpful to have a trusted partner at your side. If you need assistance with your JD Edwards system, contact our experienced team.