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Fixed assets and depreciation

Keep a register of machines, vehicles, computers and other fixed assets, run depreciation, and record the sale or disposal of an asset.

The Fixed Asset Register shows each asset with its cost, depreciation so far and written-down value (WDV). Adding an asset, running depreciation and disposing of an asset each post an accounting entry for you.

Before you start

Assets are grouped into blocks by depreciation rate: Block @5%, Block @10%, Block @15%, Block @25% and Block @40%. These groups sit under Fixed Assets in your chart of accounts.
Create at least one ledger under the block you will use, for example "Machinery" under Block @15%. See Chart of accounts.
Check that the block rate matches the current Income Tax rate for that kind of asset. You can type a different rate for each asset.
You need a cash or bank ledger to show how the asset was paid for.

Add an asset

Fields marked with a star on screen must be filled.

Open Accounting > Fixed Assets.
Click Add Fixed Asset.
Enter the Asset name.
Leave Asset code (auto if blank) empty to get a code, or type your own.
Enter the Acquisition date.
Pick the Block (dep rate group). Annual dep % fills in from the block. Change it if needed.
Pick the Asset ledger under that block.
Enter the Cost ₹.
Pick Funded by (Bank/Cash), the account that paid for the asset.
Click Capitalize + post JV. The asset ledger is debited and the bank or cash ledger is credited.

Add an asset from a purchase bill

Use this when you already recorded the asset as a purchase. The original purchase is not changed. A separate entry moves the cost from purchase to the asset ledger.

Click From Purchase.
Pick the Purchase Invoice. Only item-mode purchases are listed, newest first.
Tick each line that is an asset. A line already made into an asset is greyed out and says Already captured as ....
For each ticked line, check the asset name and pick the Block. Pick the Asset Ledger, or leave it on (auto) to use the first ledger under that block.
Click Capitalize selected.

The cost taken is the taxable value of the purchase line.

Run depreciation

Click Run Depreciation.
Set Period start and Period end. For a full year, use the first and last day of the financial year.
Click Preview. Check the opening WDV, depreciation and closing WDV of each asset.
Click Post depreciation JV. One entry debits Depreciation Expense and credits Accumulated Depreciation.

Depreciation is worked out on the WDV method, for the number of days in the period. An asset bought during the period gets depreciation only from its acquisition date. On an asset's first run, if it was used for less than 180 days, it gets half the depreciation for that run. Do not run two periods that overlap.

Sell or dispose of an asset

Find the asset. Click the Dispose / sell button in its row.
Check the cost, accumulated depreciation and WDV shown at the top.
Enter the Disposal date and the Proceeds ₹ (the sale amount, or 0 if scrapped).
Pick the Proceeds account (Bank/Cash).
Check the gain or loss message. It is posted to Gain/Loss on Sale of Fixed Asset.
Click Dispose + post JV.

View and export

Use Status to show In service, Disposed or All assets. The totals at the top show Total Cost, Accumulated Dep and Net Block (WDV).
Click the eye button (View detail + dep history) to see an asset's details and every depreciation run.
Click Export Excel to download the register.

Common problems

Pick the funded-by account (Bank/Cash) — choose the bank or cash ledger that paid for the asset.
No ledger exists under '...' — the block has no ledger. Create one under that block in the chart of accounts, then try again.
Asset code '...' already exists — type a different code, or leave it blank.
Already depreciated up to ... — depreciation for that end date was already posted for the assets named. Pick a later period.
Asset already disposed — this asset was disposed earlier. Change Status to Disposed to see it.
Disposal date must be >= acquisition date — the disposal date is before the purchase date. Correct it.
Run Depreciation is grey — there are no assets in service.

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