Fixed Assets & Depreciation

Asset or expense?

The distinction is how long the thing lasts:

• Fixed asset — used over several years. Its cost is spread across those years through depreciation.
• Expense — consumed now. The full cost hits this period's profit and loss.

A commercial oven is an asset; the gas that runs it is an expense. Booking the oven as an expense makes one month look disastrous and every later month look better than it was.

What the register shows

Each asset carries its Acquisition details, the Account it sits under, its Book Value today, its Monthly Depreciation and its Life Remaining. Status runs Active → Fully Depreciated → Disposed.

Common Tasks

How to Add a Fixed Asset (register asset, capitalise purchase, new equipment, add asset)

Record something you bought to use over several years.

Required permission: Accounting (manager or administrator)

1. Go to Fixed Assets in the left sidebar
2. Create a new asset
3. Enter what it is and its acquisition date and cost
4. Choose the Account it belongs to
5. Set its useful life, which drives the monthly depreciation
6. Save

Result: The asset appears on the register as Active with its Monthly Depr. calculated and its Book Value starting at cost.

Note: Useful life is a judgement with real consequences. Too short and you understate profit now; too long and you overstate it. Agree it with your accountant rather than guessing.

How to Review the Asset Register (asset list, what do we own, book value, depreciation report)

See what you hold and what it is worth.

Required permission: Accounting read

1. Go to Fixed Assets
2. Review Active Assets for the current position
3. Filter by status using All Statuses, or narrow to Active, Fully Depreciated or Disposed
4. Read Book Value and Life Remaining per asset

Result: You see the register with each asset's current value and remaining life.

Note: Total book value here should agree with the fixed asset figure on your balance sheet. A divergence means depreciation or a disposal was not posted.

How to Dispose of an Asset (sell equipment, scrap asset, write off asset, dispose)

Remove an asset you have sold, scrapped or lost.

Required permission: Accounting (manager or administrator)

1. Go to Fixed Assets and open the asset
2. Record the disposal with its date and any proceeds from a sale
3. Save

Result: The asset becomes Disposed, leaves the active register, and any gain or loss against its remaining book value is posted.

Note: Record disposals when they happen. An asset scrapped a year ago but still on the register keeps depreciating and overstates what you own.

How to Check Depreciation Is Posting (depreciation not posting, monthly depreciation, check depreciation)

Confirm the monthly charge is reaching your accounts.

Required permission: Accounting read

1. Go to Fixed Assets and note the total Monthly Depreciation
2. Open Accounting → Reports → General Ledger for the depreciation expense account
3. Confirm a charge appears each month at roughly that figure

Result: You have confirmed depreciation is being recognised rather than accumulating unrecorded.

Note: A profit and loss with no depreciation line is overstating profit by exactly the amount of wear on your equipment.