Fixed asset templates
Some of our bookkeeping templates have the possibility to record transactions as an overhead cost or a fixed asset. This depends on the amount of the asset and the length of time that the item will be useful in the business.
If the amount being recorded is £250 or more then you will see that a tick box for Record as fixed asset will appear.
If the box remains unticked then the relevant overhead cost (account 7XXX) will be debited.
If this box is ticked the relevant account will be debited (account 90).
The following templates have this logic:
- Fixtures and fittings: 20% VAT
- Computer costs and software: 20% VAT
- Office equipment and IT: 20% VAT
- Plant and Machinery: 20% VAT
- Development costs: 20% VAT
Creating a fixed asset
Once you have recorded a journal entry to one of the fixed asset accounts you will be prompted to add a fixed asset on the right hand side.
You will then need to enter the description and decide on the useful lifetime of the asset. This will define the period that the asset will be depreciated. Then click Save details.
At the moment the depreciation method is fixed to 'straight line' and the depreciation period is fixed to 'yearly'. Alternatively, you can click Done or navigate away from this page and still have the option to create the fixed asset later.
Note: If you record fixed assets straight from your bank from the Transactions to record page you will not be prompted to record the asset at the time recording the journal entry. The same applies if you are on the cash scheme and you have created a supplier invoice and you record a payment. You will only be able to create the fixed asset from the Fixed assets page.
If you want to create the fixed asset later you can do so by going to Accounting and then Fixed assets. Under Missing information you will see the fixed assets that have been recorded but you haven’t created the fixed assets yet by clicking on Save details.
Note: Under Missing information you will only find assets that have been recorded for the current fiscal year. So, you need to make sure you create the fixed assets before the end of the year otherwise you will need to record and track the depreciation manually.
Once you have recorded the fixed assets and the assets are created, they will then move below the search bar.
Once a fiscal year that an asset has been created for has finished, you will be able to click on the asset in the list above, then click on Depreciate as shown below.
Clicking on Depreciate will record the depreciation journal which will show the journal within the connected journal entries.