Setup Fixed Assets

The Fixed Assets option allows you to set up a record for each fixed assets that your business owns.  The primary purpose for this is to provide the program with information necessary to print a Balance Sheet report that is based on market values for fixed assets instead of the book value.

Go to Fixed Assets > Setup Fixed Assets.

Asset #

Each asset must be assigned a unique ID number.  The ID number is a six digit alphanumeric entry.

Description

Enter a description for this asset.

Asset Group

Enter the asset group that this asset should be assigned to.  The asset group is a two digit alphanumeric code.  It is used for reporting (selecting which assets to appear on a report) and it also determines what general ledger accounts are used when posting depreciation transactions.

Serial #

If applicable, enter the serial number for this asset. 

Location

Enter the location of the asset.  If an asset is mobile, you may want to keep this field updated so that the current location can be looked up in the asset file.  The location is a free form entry field, so it could be an address, description of a location, warehouse, city, etc.

County/State

Enter the county and state where the asset is located.  It may be helpful to track the location by county and state for property tax purposes.

Date Purchased

Enter the date that the asset was purchased.  This may be different than the starting date entered below, which is used to determine when depreciation entries should start being posted to the general ledger.

Depr. Last Posted On

This date will be tracked automatically by the program, and will show the last transaction date that depreciation entries were posted on.

Mid Quarter

When using a depreciation table, checking this box will cause the program to use the mid-quarter rates that correspond to when this asset was placed in service.  If this box is not selected, then the half-year rates will be used.

This box has no effect on depreciation calculated on either a straight line or declining balance basis.

Retire Date

If this asset is no longer in service, enter the date that it was retired.

Sold On / Sale Amount

These entries can be used for the sale information when an asset is sold.  Entering a sale amount here will not generate a transaction to gain/loss on sale of asset. 

When entering the deposit for the sale of an asset, enter a deposit crediting the asset account for any remaining value that you have on the books for this asset.  The difference between the book value and the remaining value should be posted to your gain or loss on sale of asset account.

A deposit for the sale of an asset can either be done through the Deposit entry on the Checkbook Register or by entering two Miscellaneous Cash Receipts in Accounts Receivable.

Market Value

The Market Value can be used to specify the fair market value for an asset.  A Balance Sheet report may be run that

Salvage Value

The salvage value is the book value that will remain when the asset is fully depreciated.  If the asset will be fully depreciated, enter 0 for the salvage value.

The Fixed Asset system supports calculating and posting depreciation for each asset in four different ways:  book, federal, state, and AMT.  Book depreciation is the amount that is actually posted to your general ledger and affects your financial statements.  In some cases, depreciation methods and calculations may differ for tax purposes.  When preparing tax returns, you may need to substitute book value depreciation expense totals with the allowable federal, state or alternative minimum tax amount totals.

As an example, for tax purposes, you may be eligible to take accelerated depreciation that meet certain requirements, for instance assets of a certain class and/or that are put into service in specific tax years.  In these cases you may need to calculate bonus depreciation amounts for tax reporting purposes.

Or, you may want to use straight line depreciation for financial reporting purposes, but need to use the MACRS depreciation tables for tax purposes.

At the bottom of the asset setup window, there are four tab pages where you can enter individual settings for each of the four depreciation types that are supported.

If you do not want to use the Fixed Assets for depreciation for tax purposes, you do not need to enter anything on the Federal, State, or Alt Min Tax tab pages.

The final tab page at the bottom of the setup window allows you to enter the cost centers that will be used when posting book value depreciation.  If you are not using cost accounting, or do not need the depreciation expenses posted to specific cost centers, it is not necessary to enter any information on this tab page.