Depreciate fixed assets

Fixed Assets lists equipment, vehicles and property the business keeps for more than a year, and depreciates them: each one's cost is spread over the years it is used, as an expense, instead of all at once. The list shows each asset's cost, how much has been depreciated and its value now.

Add an asset

Record the purchase as usual, as a bill, an expense or a bank transaction, to Equipment or another account with the detail type Equipment or property. For something the business already had when the books start, include it in the opening balances.

Then choose Add fixed asset and enter its name. Choosing an item from Asset Tracker links it and brings in its purchase date and price, when the price is in the books' currency. Only people on the team can link Asset Tracker items, so an accountant who is not a member enters a name.

On the asset's page, click a detail to change it:

• Account: the Equipment or property account its purchase went to.
• Cost: what it cost in the books' currency, the same amount its purchase added to its account.
• Depreciation starts: usually the purchase date. The whole of that month is depreciated.
• Method: Straight line takes the same amount each month over its Useful life, in years. Declining balance takes a yearly percentage (Rate a year) of the value left, a twelfth each month, so the amount gets smaller over time. Not depreciated suits land.
• Value at the end: what it will be worth when you stop using it, if anything. Depreciation stops there.

Monthly depreciation

When a month ends, Accounting will enter that month's depreciation for every asset as one entry dated the month's last day: it adds to Depreciation and takes the same amount off the assets' value in Accumulated depreciation. If you change an asset, its earlier months are entered again to match. Months in a closed period are not changed; the difference is entered on the first open day. Depreciation by year on the asset's page shows each financial year's depreciation and what the asset is worth at its end.

Depreciation from before the books start belongs in the opening balances: the asset's page shows the amount to enter, as a negative amount, for Accumulated depreciation.

On the cash flow statement, depreciation is added back to net income, because it uses no cash.

Dispose of an asset

When the business sells, scraps or loses an asset, choose Dispose and enter the date. Its cost will come out of its account and its depreciation out of Accumulated depreciation; what it was still worth will go to Gain or loss on disposals. It is not depreciated for the month it was disposed of. If it was sold, record the sale as usual, such as an invoice or a bank transaction, to Gain or loss on disposals, so that account shows the gain or loss. When its Asset Tracker item is retired or lost, the asset's page says so.

Put back in use reverses a disposal. Remove takes an asset out of Fixed Assets and reverses its depreciation; its purchase stays in the books.

For depreciation that looks wrong, Contact support.