Fixed assets and depreciation
Depreciation spreads the cost of a fixed asset over its useful life. Zhmara X calculates and posts it for you, per month or per year, with the method set on each asset.
The fixed assets list
Assets › Fixed Assets lists every asset created by an approved asset bill: purchase date and price, accumulated depreciation, book value, and when the next depreciation is due. Fully depreciated assets are marked.
Methods
The method follows the asset's Depreciation Rate:
| Method | When | Yearly amount |
|---|---|---|
| Straight Line Method | Rate is 0 | (purchase price − salvage value) ÷ useful life, the same every year |
| Declining Balance Method | Rate is not 0 | current book value × (rate ÷ useful life), so it gets smaller each year. A rate of 2 gives double-declining balance. |
A month's depreciation is the yearly amount ÷ 12. Depreciation stops at the end of the useful life, or when the book value reaches the salvage value; the last period takes whatever is left, so the asset ends exactly at its salvage value.
Two ways to run it
Your company uses one of these ways, never both. The first time you post depreciation decides which:
- All assets together: on Fixed Assets, click One Month for All Assets or One Year for All Assets. Every asset that is due is depreciated, each with its own method.
- One asset at a time: open an asset (its depreciation schedule page) and click Depreciate One Month or Depreciate One Year. A depreciation run is posted at once, so both need the approve permission for fixed assets.
"Once you depreciate from here, depreciation on each asset's page is turned off, and the other way around." If you try the other way you'll see, for example, "This company depreciates all assets together from the Fixed Assets list."
Rules
- An entry is posted only once its period date has arrived, and is dated on that date. If nothing is due yet: "No asset has depreciation due for this period yet."
- The period must be in an open financial year and month. Otherwise depreciation for that asset is not posted, and the message names it.
- Only an asset's latest entry can be deleted ("Only the latest depreciation of an asset can be deleted. Delete the newer entries first."). Delete All Depreciations on an asset removes all of its entries.
What it posts
Dr depreciation expense, Cr accumulated depreciation, for each asset and period. The two accounts are the Depreciation Expense Ledger and Accumulated Depreciation Ledger in Ledger configuration (Fixed Assets tab); if either is empty, depreciation is refused ("Choose the Depreciation Expense and Accumulated Depreciation accounts in Ledger Configuration first.").
Reports
Fixed Asset Register, Asset Depreciation, Asset Purchases and Asset Payments are under Reports › Assets. See Other reports.