Fixed assets

What this does

Ledger → Fixed Assets is the register of equipment the shop owns and depreciates rather than expenses: lifts, alignment racks, diagnostic tools, vehicles, computers, the building if you own it. Each asset carries what it cost, when you bought it, how it depreciates, and which ledger accounts it lives in. The monthly depreciation run reads this register; the Balance Sheet shows the assets net of what's been depreciated.

Before you start

accounting.manage. The asset already paid for (a check, a card charge, or a bill categorized to the fixed-asset account, so the cost is on the balance sheet). Three ledger accounts per asset: the Asset Account (an asset-type account such as Equipment or Vehicles), the Accumulated Depreciation Account (a contra-asset), and the Depreciation Expense Account. Talk to your tax preparer about method, recovery period, Section 179, and bonus depreciation; the app records what you decide, it doesn't decide for you.

Steps

Add Standard Categories the first time: it seeds the usual categories (shop equipment, vehicles, computers, furniture, building improvements) with default recovery periods. You can add your own.

Add Fixed Asset. Name, Category, Purchase Date, Purchase Cost, Salvage Value (what it'll be worth at the end), Vendor, Serial #, Asset Tag #, Location, Assigned To, Condition, Insurance Value, Warranty Expiration, Description, Notes. Then the depreciation fields: Depreciation Method (MACRS, Straight-Line, 150% or 200% Declining Balance, Sum-of-Years-Digits, or No Depreciation for land), Useful Life (months), Recovery Period (years) for MACRS (3, 5, 7, 10, 15, or 39), Section 179 Amount, Bonus Depreciation %, and the three accounts.

Only Straight-Line and MACRS are computed by the monthly run today; an asset set to a declining-balance or sum-of-years method is depreciated straight-line. Choose one of those two unless your preparer needs otherwise and is booking depreciation by journal entry.

The list filters by Category and Status (Active, Disposed, Retired) and searches name, tag, and serial. Click an asset for its page: Asset Information, Net Book Value (cost less accumulated depreciation), the Activity tab (every depreciation posting), and Improvements.

Add Improvement records a capital improvement to an existing asset (an engine overhaul on the shop truck, a new motor on the lift): Description, Date, Amount, Extends Life (years). It's recorded on the asset for the schedule and the tax return; the improvement's cost is not added to the depreciable basis by the monthly run, so a large improvement is better entered as its own asset.

What happens in the books

Adding an asset posts nothing; the purchase already did (Dr the asset account when you paid). Depreciation posts monthly: Dr Depreciation Expense / Cr Accumulated Depreciation. Section 179 and bonus amounts reduce the basis the run depreciates; the bonus itself is expensed in the first year's run.

Common problems

The asset never depreciates. Missing accounts on the asset, method set to No Depreciation, useful life zero, or the basis (cost less salvage less Section 179) is zero. Edit the asset.

Cost on the balance sheet doesn't match the register. The purchase was categorized to an expense instead of the asset account, or the register has an asset that was never paid for through the app. Fix the purchase's category from the register, or post the cost by journal entry for an asset bought before you started the books.

I bought a tool for $80. Expense it. Fixed assets are for things that last years and cost enough to matter; your preparer will have a threshold.