# Finance Fixed Assets & CapEx Framework

## Purpose

This workbook defines the static **Fixed Assets & CapEx architecture** for **HAV Seafood**. It is part of **Phase 1 — Business Architecture** and describes how physical assets are financially classified, capitalized, depreciated, governed and ultimately disposed of.

It does **not** contain operational or historical fixed-asset accounting such as acquisition costs, capitalization dates, depreciation runs, accumulated depreciation, net book values, CapEx requests, project spend, disposals, impairments or journal postings.

The principal model is:

`Authoritative Physical Asset -> Finance Fixed Asset Reference -> Asset Class -> Capitalization / Depreciation Policy -> Future Accounting Event`

and for investment projects:

`CapEx Concept -> Review / Approval Architecture -> Eligible Costs -> Capital Work in Progress -> Ready for Use -> Finance Fixed Asset`

## Architecture scope at a glance

The workbook contains:

- **88 current Finance fixed-asset references**, mapped one-to-one to the 88 existing Production `Equipment_ID` records;
- **8 fixed-asset classes**;
- **9 depreciation profiles**;
- **9 CapEx categories**;
- **6 CapEx project types**;
- **11 CapEx lifecycle statuses**;
- **10 capitalization cost types**;
- **7 repair-versus-capital rules**;
- **51 Maintenance-to-Finance task relationships**;
- **11 fixed-asset accounting event/posting rules**;
- a complete source, ownership, relationship, control and data-dictionary layer.

All 88 current Production equipment records are owned and operationally active in the upstream source. The Finance reference does not reconstruct their historical accounting state.

## Core ownership principles

- **Production** remains authoritative for current machinery/equipment identity, technical characteristics, work-center assignment and operational status.
- **Maintenance** remains authoritative for preventive maintenance tasks, criticality, calibration and technical condition/work evidence.
- **Shared Enterprise** remains authoritative for enterprise locations, departments and system identity.
- **HR** remains authoritative for positions and incumbency.
- **Procurement** remains authoritative for supplier/sourcing and future purchase-order facts.
- **Finance** owns the `FAS-*` financial reference, asset class, capitalization policy, depreciation policy, CIP treatment, disposal/impairment accounting rules and fixed-asset financial posting treatment.
- `ESYS-001 Core ERP` is the Finance fixed-asset/accounting system of record.
- `ESYS-009 Power BI` is reporting only and does not become authoritative.

## Current asset-class distribution

- **Production Processing Machinery (`FACLS-001`): 38 current Production assets**
- **Packaging & Coding Equipment (`FACLS-002`): 19 current Production assets**
- **Material Handling Equipment (`FACLS-003`): 12 current Production assets**
- **Maintenance & Utilities Equipment (`FACLS-004`): 7 current Production assets**
- **Sanitation Equipment (`FACLS-005`): 3 current Production assets**
- **Quality, Inspection & Weighing Equipment (`FACLS-006`): 9 current Production assets**

## Current responsibility distribution

- **Warehouse & Logistics (`DEPT-LOG`): 6 current assets**
- **Maintenance & Engineering (`DEPT-MNT`): 8 current assets**
- **Production (`DEPT-PROD`): 71 current assets**
- **Quality & Food Safety (`DEPT-QUAL`): 1 current assets**
- **Sanitation (`DEPT-SAN`): 2 current assets**

## Important accounting assumptions

### Capitalization threshold

The workbook uses a synthetic internal HAV Seafood capitalization threshold of **DKK 20,000** for future acquisition architecture. This is **not presented as Faroese statutory accounting law**.

Existing Production equipment is included as Finance asset references regardless of whether its historical acquisition would have met this threshold. Historical accounting treatment is not reconstructed.

### Depreciation

The default architecture uses **straight-line depreciation** with class-based synthetic useful lives. The workbook does not calculate accumulated depreciation from `Year_Installed`, because that would create an artificial historical accounting record unsupported by the source architecture.

### Capital Work in Progress

`GL-1580 Capital Work in Progress` is used for qualifying project/acquisition costs before an asset is ready for intended use. Actual CIP balances and project spending belong to Phase 3.

### Disposal and impairment GL limitation

The current Finance chart of accounts does not contain dedicated fixed-asset impairment or disposal gain/loss accounts. The workbook therefore flags those treatments for future controlled chart-of-accounts review rather than inventing unauthorized GL accounts.

## Workbook sheets

### Core fixed-asset master

- `Fixed_Asset_Classes` — Finance asset classes and GL/depreciation defaults.
- `Fixed_Asset_Master` — one-to-one Finance references for the current Production equipment master.
- `Asset_Source_Mappings` — identifies upstream asset-master ownership and possible future source domains.
- `Asset_Responsibility` — department, cost-center and position responsibility.

### Capitalization and depreciation

- `Capitalization_Policies` — capitalization threshold and policy structure.
- `Capitalizable_Cost_Types` — which acquisition/project costs are normally capitalizable.
- `Repair_vs_Capital_Rules` — distinguishes routine expense from capital improvement/replacement review.
- `Depreciation_Profiles` — standard method/useful-life policies.
- `Asset_Depreciation_Assignments` — current Finance-asset-to-profile relationships.
- `Asset_Component_Rules` — restrained component-accounting rules for material components only.

### CapEx governance

- `CapEx_Categories` — replacement, capacity, quality, reliability, efficiency, IT, administration, compliance and new-product capability.
- `CapEx_Project_Types` — structural project classifications.
- `CapEx_Status_Model` — lifecycle statuses from concept through close/cancel/reject.
- `CapEx_Approval_Rules` — required sponsoring, Finance and specialist roles. Exact monetary approval bands are intentionally deferred to the later Finance Process & Internal Control architecture.
- `CapEx_Cost_Categories` — project cost classification.
- `CapEx_GL_Mappings` — asset-class accounting mappings to the existing chart of accounts.
- `CIP_Rules` — Capital Work in Progress treatment.
- `Acquisition_Source_Rules` — allowed sources of future asset creation.
- `Capitalization_Requirements` — requirements before an asset may move from CIP/implementation into active Finance fixed-asset accounting.

### Lifecycle, maintenance and accounting

- `Asset_Status_Model` — Finance-specific asset statuses.
- `Disposal_Types` — controlled disposal classifications.
- `Disposal_Accounting_Rules` — static derecognition treatment.
- `Impairment_Rules` — impairment triggers, evidence and Finance-review structure.
- `Maintenance_Finance_Bridge` — connects every current Maintenance task to a default Finance expense/capitalization-review treatment without changing Maintenance ownership.
- `Fixed_Asset_Posting_Rules` — static accounting event mappings for acquisition, capitalization, depreciation, transfer and disposal.

### Governance and AI/reference layer

- `Responsibility_Mappings` — domain/position responsibility.
- `System_Data_Ownership` — systems and source-of-truth boundaries.
- `Source_Mappings` — authoritative source lineage.
- `Relationship_Catalog` — key cross-domain relationships.
- `Architecture_Notes` — assumptions and boundaries.
- `Control_Parameters` — structural validation counts.
- `Data_Dictionary` — field-level reference.

## Critical conceptual boundaries

`Equipment_ID != Fixed_Asset_ID`

`Operational Equipment Status != Finance Asset Status`

`Maintenance Task != Capital Expenditure`

`Routine Repair != Asset Improvement`

`CapEx Project != Fixed Asset`

`Capital Work in Progress != Active Fixed Asset`

`CapEx Approval Rule != Approval Event`

`Depreciation Profile != Depreciation Posting`

`Disposal Type != Disposal Event`

`Impairment Rule != Impairment Loss`

These distinctions must remain intact during later operational-data generation.

## Phase 1 exclusions

The workbook intentionally contains no:

- asset acquisition costs;
- supplier invoices or purchase orders;
- capitalization dates;
- current book values;
- accumulated depreciation;
- depreciation runs;
- fixed-asset journal entries;
- actual CapEx projects or business cases;
- CapEx budgets or commitments;
- project spend;
- CIP balances;
- actual approval requests/decisions;
- transfers;
- impairments;
- disposal events or proceeds;
- realized gains/losses;
- maintenance work orders or repair costs.

Those belong to Phase 3 after Phase 2 business stories have been selected.

## Story neutrality

The architecture does not deliberately seed:

- failing assets;
- impaired machinery;
- unauthorized capital spending;
- CapEx overruns;
- delayed projects;
- incorrect capitalization;
- excessive maintenance capitalization;
- disposal losses;
- approval bypasses;
- fixed-asset accounting errors.

Those should be designed deliberately in Phase 2 if required.

## Recommended AI navigation

- **What is the Finance asset for an equipment record?** -> `Fixed_Asset_Master` using `Source_Asset_ID`.
- **Which asset class/account/depreciation policy applies?** -> `Fixed_Asset_Classes`.
- **What depreciation policy is assigned?** -> `Asset_Depreciation_Assignments` then `Depreciation_Profiles`.
- **Should expenditure be repair or CapEx?** -> `Repair_vs_Capital_Rules`.
- **Is a cost capitalizable?** -> `Capitalizable_Cost_Types` + `Capitalization_Policies`.
- **How is CapEx classified?** -> `CapEx_Categories` + `CapEx_Project_Types`.
- **What must happen before capitalization?** -> `Capitalization_Requirements` + `CIP_Rules`.
- **How does Maintenance relate to Finance?** -> `Maintenance_Finance_Bridge`.
- **How is an asset acquisition/depreciation posted?** -> `Fixed_Asset_Posting_Rules`.
- **Who owns the source fact?** -> `Source_Mappings` + `System_Data_Ownership`.
- **Who reviews/owns the decision?** -> `Responsibility_Mappings` + `CapEx_Approval_Rules`.

## Overall role

Together, the workbook forms the **static fixed-asset, capitalization, depreciation and CapEx financial-control layer** for HAV Seafood. It allows future operational asset accounting and investment-project data to join consistently to Production equipment, Maintenance evidence, Procurement/AP activity, HR positions, enterprise locations and the Finance chart of accounts without creating competing master data.
