• EH Lim

Fixed Assets


Fixed assets, which is a non-current asset, is a balance sheet account. The Plant and Machinery, Furniture and Fittings, Office Equipment, etc. are fixed assets.

It is common for small business accounting software not includes a fixed assets module; a module which allows the user to tracks and calculates depreciation of an individual asset automatically.

You can use a spreadsheet as a fixed assets register if the requirement is simple. Do consider a fixed asset management software if you have outgrown a 'spreadsheet' asset register or get a custom solution which tailors to your need. Tracking and reconciling assets can be a complicated process, especially when you have hundreds or thousands of them (and in multiple locations).

The asset, which you have purchased, need to update in both accounting software and the fixed assets register. It debits the fixed asset account and credits accounts payable or a bank account (depending on the transaction type or accounting method) when recording the transaction in an accounting system.

The spreadsheet (asset register) capture information such as the assets ID, date acquired, description, cost, depreciation, accumulated depreciation, and net book value. Optionally, you may include the serial number, supplier, supplier's invoice date and reference number, warranty expiry date, asset location, who uses it, etc. (Do consult your accountant if you do not know how to create an asset register with a spreadsheet for your region).

Based on the fixed assets register, record the monthly or yearly depreciation via a general journal; it debits depreciation expense and credit accumulated depreciation account.

It may be good to have the asset register separated from the accounting system. When you changed accounting systems as your business grow or change of business model, it does not affect the asset register.

#fixedassets #depreciation #MoneyWorksaccountingsoftware #smallbusinessaccountingsoftware

337 views

Visit

33 Ubi Avenue 3 #07-50 VERTEX (Tower A) Singapore 408868 

Call

T: +65 6634 6065

F: +65 6337 2616

  • facebook

© 2013 by

LedgerWorks Pte Ltd

Proudly made by Wix.com