---
title: "Configuring Investments"
description: "The Investment accounting rule type can be used to plan new investments and their depreciation/amortization. The configuration specifies the bank account, value-added tax and cash flow impact. Furthermore, the rule including the useful life and the accounts for the accumulated depreciation/amortization in the balance sheet and the expense in the P&L are determined."
source_url: https://support.lucanet.cloud/en/documentation/consolidation-financial-planning/planning/accounting-rules/configure-investment
language: en
last_updated: 2023-08-16
---
# Configuring Investments

## Overview

The **Investment** accounting rule type can be used to plan new investments and their depreciation/amortization. The configuration specifies the bank account, value-added tax and cash flow impact. Furthermore, the rule including the useful life and the accounts for the accumulated depreciation/amortization in the balance sheet and the expense in the P&L are determined.

## Configuring Investments

To configure an accounting rule of the type **Investment**:

{% stepper %}
{% stepper-step %}
In the dimension bar, select the combination of **data level** and **reporting entity** for which the accounting rule should apply.
{% /stepper-step %}
{% stepper-step %}
In the tree view, select the desired element (ledger, account, or item).
{% /stepper-step %}
{% stepper-step %}
Click **Edit** in the top right to open editing mode.
{% /stepper-step %}
{% stepper-step %}
If you selected a ledger, open the **Balance with carry forward from previous period** tab.
{% /stepper-step %}
{% stepper-step %}
Select **Investment** as the accounting rule from the **Type** drop-down list.
{% /stepper-step %}
{% stepper-step %}
**Add** or **delete a time period** to, e.g., configure seasonal differences within a planning period.

{% /stepper-step %}
{% /stepper %}
{% info-box %}
Notes on the **Add/Delete time period** options:

- Newly added time periods are displayed on the **Configuration** tab.
- When deleting a time period, the currently selected tab is always deleted.
{% /info-box %}

## Options on the Configuration Tab

Configuration options for an Investment

The following options are available on the **Configuration** tab:

### VAT/Input Tax Configuration

Optionally, you can select a VAT/input tax configuration from the drop-down list (see [VAT/input tax administration](https://support.lucanet.cloud/en/documentation/consolidation-financial-planning/planning/accounting-rules/vat-input-tax.md)).

### Depreciation/Amortization Rule

The following depreciation/amortization rules are available:

| Rule | Description |
|---------|---------|
| No depreciation/ amortization | If the investment is not to be depreciated/amortized |
| Immediate depreciation/ amortization | If the depreciation/amortization is to take effect immediately |
| Straight-line depreciation/ amortization | If the investment is to be depreciated in equal monthly amounts over its useful life |
| Declining balance method of depreciation/ amortization: | If the investment is to be depreciated using a fixed annual percentage rate |

### Useful Life

In the **Useful life** field, you can enter the term of the depreciation/amortization in months.

{% info-box %}
This field is only visible if you selected either **Straight-line depreciation/amortization** or **Declining balance method of depreciation/amortization**.
{% /info-box %}

### Percentage

In the **Percentage** field, you can enter the percentage for calculating the annual depreciation/amortization amount.

{% info-box %}
This field is only visible if you selected **Declining balance method of depreciation/amortization.**
{% /info-box %}

### Payment Type

The following payment types are available:

| Payment type | Description |
|---------|---------|
| With immediate cash flow impact | If the payment will be received or made within the same month |
| Time-delayed payment | If the incoming or outgoing payments are made at different times |
| Down payment transaction | If a down payment is required when the transaction is completed |

### Cash Flow Impact

{% info-box %}
The **Cash flow impact** section is only visible if you selected **Time-delayed payment** or **Down payment transaction** from the payment type drop-down list.
{% /info-box %}

In the **Cash flow impact** section, specify a due date for the payment, along with percentage of the outstanding receivable or liability to be paid in each case.

#### Due by date

- Enter 0 for immediate payments.
- Enter a positive number for a subsequent payment, e.g. 2 = 2 months later.
- Enter a negative number for an earlier payment, e.g. -2 = 2 months earlier.

{% idea-box %}
To see an example of how average incoming payments can be entered on the **Month** basis, check [Cash Flow Example](#cashflowexample).
{% /idea-box %}

#### Share

Enter what percentage of the outstanding receivable or liability will be paid by the specified date.

### Cash Flow Example

Example

Setting

Customers pay after 15 days on average

Example setting for the cash flow impact

Customers pay after 30 days on average

Example setting for the cash flow impact

Customers pay after 45 days on average

Example setting for the cash flow impact

### Post to

Specify the accounts to which postings will be made in the **Post to** section.

The accounts to be specified depend on the chosen depreciation/amortization rule and the payment type.

#### No depreciation/ amortization

- **Bank account**: An account for the contra entry
- **Receivables or liabilities account**: An account to which the corresponding value is posted until the cash flow impact takes effect.\
\
(Only with **time-delayed** payment type)

#### Immediate, straight-line and declining balance method of depreciation/ amortization

- **Bank account**: An account for the contra entry
- **Receivables or liabilities account**: An account to which the corresponding value is posted until the cash flow impact takes effect\
\
(Only with **time-delayed** payment type)
- **Accumulated depreciation/amortization in the balance sheet**: An account used for correcting the asset value reduced by depreciation
- **Depreciation/amortization in the P&L**: An account where the depreciation/amortization is to be posted\
\
(Only with **time-delayed** payment type)
- **Account for payment received or made:** An account to which the down payment will be posted until the service is provided\
\
(Only with **down payment transaction** payment type)