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Add Fixed Asset

At you can add fixed assets, automatically calculate depreciation on a straight line method and dispose of either by selling on account, for cash, that will properly be accounted in your financial reports.

Add Fixed Asset

To add a fixed asset, go to Fixed Assets listing page, and click Add. From Category select the Fixed Asset Category, such as Furniture & Fixtures, Equipment, etc. If you cannot locate the right fixed asset category, then go to the Chart of Accounts, and add the right category Fixed Asset account.

Fixed Asset Code is automatically generated and comprises of suffix + four digit number. You can input any combination of suffix and digits in the pattern provided.

Fixed Asset Cost is a historical price of a fixed asset in company's base currency. Thus, if you set up your company with, and your company base currency is USD, any number in Fixed Asset Cost is also denominated in USD.

Fixed Asset Purchase Date is the date when a Fixed Asset is purchased. If a purchase date of a fixed asset is after your company conversion period, and if Calculate Depreciation is enabled, the system calculates depreciation expense and accumulated depreciation expenses. 

Useful life - is entered in years, which in the depreciation calculation used as the denominator. Useful life usually refers to the duration for which the item will be useful (to the business), and not how long the property will actually last. Many factors affect a property's useful life, including the frequency of use, the age when acquired and the repair policy and environmental conditions of the business. The useful life for identical types of property will differ from user to user depending on the above factors, as well as additional factors such as foreseeable technological improvements, economic changes and changes in laws.

Residual Value - is subtracted from cost of the fixed asset in calculating depreciation expense throughout the useful life of the asset.

How much a fixed asset is worth at the end of its useful life.
If you are a business owner, let's say your desk has a useful life of ten years. How much the desk is worth at the end of ten years (its fair market value as determined by agreement or appraisal) is its residual value (also known as salvage value).

Purchase Invoice - through this link you can add this fixed asset to purchase invoice form.

Purchase Order - through this link you can add this fixed asset to purchase order form.

Account - field completes the required input fields and it is related to an account from chart of accounts. This field is the account that the fixed asset financed by. You need to select one account if you do not link this fixed asset to Purchase Order or Purchase Invoice.

After entering all fields and clicking save, fixed asset is created and it is saved in the system.

Add Fixed Asset

Purchase Date After Conversion Date

For instance, if you purchased a fixed asset in the amount of $130,000, with useful life 10 years and a residual value of $10,000 on February 2012, and your company conversion date is January 2012, the following transaction transpires:

Fixed Asset Dr.     130,000

       GL Account (or AP) Cr.           130,000

Depreciation Expense Dr.  2,000 

        Accumulated Depreciation Cr 2,000

Purchase Date Before Conversion Date

If purchase date of the fixed asset is December 2011, 

Fixed Asset     Dr. 130,000

    GL Account (or AP)             Cr. 129,000 (130,000 -  one month acc. depreciation)

    Accumulated Depreciation Cr. 1,000

See also

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