Description

Fixed assets are assets purchased for long-term use, and are not liquid or likely to be converted quickly into cash, such as land, buildings, and equipment. Generally, an asset is considered fixed if it is an asset you do not plan to convert to cash within the next year. To properly account for fixed assets, customers typically record the acquisition of that asset, and the subsequent deprecation/amortization of that asset over time. This article will speak to how to account for fixed assets in SoftLedger.

• Input the acquisition of a fixed asset
• Record the depreciation for the fixed asset
• Create a fixed asset depreciation schedule
  • Download Template

Input the acquisition of a fixed asset

The first step is to record the acquisition of a fixed asset as a Journal Entry. Let's look at an example of purchasing equipment (3 Drill Press) for  $ 8,034.72 total. The Journal Entry would look something like the below:

Record the Journal Entry for the Acquisition of the purchase:

Dr. Equipment $ 8,034.72
Cr. Cash $ 8,034.72

Record the depreciation for the fixed asset

Once you have recorded the acquisition of a fixed asset, the asset should be depreciated over time, so you can expend the asset over the lifetime of its use. To continue our example, let's review an example of depreciating the $ 8,034.72  fixed asset once a month for 120 months.

Record a depreciation Journal Entry for the first month of the fixed asset's life:

Dr. Depreciation $66.96
Cr. A/D - Other Fixed Assets $66.96

Record ongoing depreciation entries

Options 1: Recurring Journals as straight-line depreciation entries 

If the asset is depreciated using a straight-line depreciation method, create a template journal from the first created depreciation entry in the steps above

Click into the Journal Number to view, and then click the Create Template icon:And complete the creation of the template:

And finally under Financial>Journals>Recurring Journals tab, create a schedule for creating the monthly depreciation entry:

See more information and ways to utilize recurring document entries in our dedicated support article here.

Option 2:Create a fixed asset depreciation schedule

Or, if you ultimately want more control over the creation of deprecation entries, you can create a schedule in excel that is formatted to our journal upload template to be able to create journals at the time of depreciation. This method could be used for linear depreciation or any other methodologies. See template example below:

Download Template

Note: The actual Journal Upload of this schedule would occur at the time of the depreciation entry, meaning you cannot upload Journal Entries that take place in the future.

In addition, be sure to check out the Bulk Journal Upload support article that this depreciation schedule is based on for the upload of the monthly Journal Entries.