In order to use D365 Business Central standard prepayment functionality (with unrealized VAT), it is required to add General Product Posting Group to Fixed Asset Card, because it is not sufficient of having it only on the G/L level, that is driven by the FA Posting Group.

Following the same principle as Items, Resources, Item Charges, G/L Accounts that are used in the lines, each of these cards have a General Product Posting Group, whereas the combination of General Business Posting Group and General Product Posting Group determines the Sales prepayment and Purchase Prepayment Account.

For example, FA posting group "Other" has an acquisition account 1220 Other tangible assets with predefined General Product Posting Group- FA. There are 2 different fixed assets that are classified as other tangible assets:

1- furniture (standard rate VAT)

2- company media system (subject to local reverse charge VAT)

Based on current situation:

1. 1220 Other tangible assets has 1 General Product Posting Group- FA
2. Based on General Posting Setup - there is only one Purchase Prepayment Account 2190 specified per combination LOCAL+FA
3. Inside the purchase prepayment account 2190 there is only one VAT Product Posting Group, that determines the VAT rate for the prepayment account.
4. As a result, on posting purchase prepayment, both FA will have posted unrealized VAT with standard rate.