Fixed assets

The fixed asset register is optional. Turn it on under Settings → Features when you own assets worth depreciating. It can't be turned off again while assets are still depreciating, because their monthly charge posts itself.

A fixed asset is something you bought to use rather than to sell: a vehicle, a generator, a fitout, a machine. Its cost is spread across the years it is useful to you rather than charged entirely to the month you bought it.

Registering an asset

Record what you bought, when it went into service, and how it should be depreciated:

• Cost, what you paid
• In service date, when you started using it. Depreciation runs from here, not from the purchase date. An asset sitting in a crate is not being used up.
• Salvage value, what you expect it to be worth at the end of its life. It is never depreciated below this.
• Method and life, see below
• The three accounts it touches: the asset account, accumulated depreciation, and depreciation expense

Depreciation methods

Straight line spreads cost less salvage evenly across the useful life. A 3,600,000 vehicle with 600,000 salvage over 60 months charges 50,000 a month. It is the common choice and the easiest to explain.

Reducing balance charges a percentage of what the asset is still carried at, so the charge is large early and shrinks over time. It suits assets that genuinely lose most of their value in the first years, such as computers.

None registers an asset that is never depreciated. This is how you record land: it appears on your balance sheet and can be disposed of, but it is not written down.

Whichever method you choose, the final charge is trimmed so the asset lands exactly on its salvage value rather than a few shillings past it.

The schedule

Depreciation is posted monthly and automatically. Each posting debits depreciation expense and credits accumulated depreciation.

The schedule shows every period: the ones already posted, taken from the ledger with their journal numbers, and the ones still to come, projected from the asset's current terms.

Because future periods are projected rather than stored, correcting an asset's cost or life shows the corrected schedule immediately. There is no stored plan to go stale.

Accumulated depreciation is added up from what was actually posted, never held as a separate figure, so the register and the balance sheet cannot drift apart.

When an asset reaches its salvage value it stops depreciating and stays on the register as fully depreciated.

Disposing of an asset

Whether you sold it, scrapped it or wrote it off, record the disposal with the date and what you received. Upscale posts a single entry:

• the proceeds into the account you received them in
• the accumulated depreciation removed
• the original cost taken off the books
• the gain or loss as whatever is left over

The gain or loss is always worked out, never typed. It is the difference between what the asset was still carried at and what it actually fetched, and that is the only figure the arithmetic supports.

A vehicle costing 3,600,000, depreciated by 150,000, sold for 3,500,000, is a gain of 50,000: the proceeds exceed the 3,450,000 it was carried at.

Once disposed, the asset stops depreciating immediately and cannot be disposed of again.

The register

The register lists every asset with its cost, depreciation to date, and what it is currently carried at, with totals. Filter by status to see only active assets, only fully depreciated ones, or the disposals in a period.