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13. Fixed Assets and Depreciation
1) Add a Fixed Asset
2) Depreciation
3) Asset Disposal
4) Forecast Depreciation
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13.1 Add a Fixed Asset
Select the menu option Sources|Fixed Assets|Enter to open the Fixed Assets List window.
Click the 'Add New Record' icon in the toolbar to insert a record, then press F3 to open the detail window.
Enter the assets code and a description.
Set the acquisition date and cost. (If entering partially depreciated assets, enter the accumulated depreciation as well.)
Set the Depreciation Start Date and Depreciation End Date. The 2 dates establish the period over which the asset is to be depreciated; thereby it sets the rate of depreciation.
Click the 'Accounts' tab, and set the Accounts and Analysis codes for the asset.
During the life of an asset, only the Depreciation related accounts are actively used. However, the Asset account should be set as it is used in asset reports to reconcile assets to ledger accounts.
Click the 'Documents' tab, and add any external documents that relate to the asset.
Please note that to retain the maximum flexibility, there is no software restriction or link between entering an asset in this part of the application and postings to asset accounts in the ledger. Use the Fixed Asset reports to establish that both areas of the application reconcile by comparing the total balances by account with the ledger balances.
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13.2 Depreciation
Select the menu option Sources|Fixed Assets|Enter to open the Fixed Assets List window.
Click 'Post Depreciation' to open a dialog on which you set the date upto which depreciation is to be posted.
Then click  to update the application with the depreciation journal.
Depreciation is calculated on an elapsed time basis less any accumulated depreciation.
Calculation formulea is:
(Acquisition cost * ((1 + Depreciation upto Date - Depreciation Start Date)/(Depreciation End Date - Depreciation Start Date))) - Accumulated Depreciation
The +1 in the elapsed time area of the calculation is because the dates are taken as inclusive.
The depreciation journal can be seen via menu option Ledger|Posted Journal Edit. The journal can be edited; the only restriction being that the line item must not be marked as 'Cleared'.
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13.3 Asset Disposal
Select the menu option Sources|Fixed Assets|Enter to open the Fixed Assets List window, select the asset being sold, then press F3 to open the detail window. Click 'Post Sale'.
Enter the disposal date (double click the date attribute to open the Date Lookup calendar).
Enter the sale proceeds - if any; and the Account, Analysis codes for the clearing account to which the sales invoices for the asset is posted.
The Account and Analysis codes for the profit/loss on disposal are taken from the asset settings (Accounts tab).
Click to journal the sale and place the sale date in the asset record.
A 'Deferred Income' account was used as the payment/invoice for the proceeds can be offset against this account.
The disposal journal can be seen via menu option Ledger|Posted Journal Edit.
The journal can be edited; the only restriction being that the line item must not be marked as 'Cleared'.
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13.4 Forecast Depreciation
To assist in forecasting future depeciation based on the exisiting asset base, use menu option Sources|Fixed Assets|Create Forecast Depn. On the window opened enter the end date for the forecast. This can be any date in the future and will normally be a date of a financial year end.
Then use menu option Sources|Fixed Assets|View Forecast Depn. to view the depreciation data created.
This data can be used in a budget or transfered to Ledger Forecast by clicking the appropriate button.
Note: only the depreciation charge records are created on a Budget/Ledger Forecast as this is normally the data required.
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