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In a particular month, depreciation monthly expense is calculated as follows:
Month Usage * (Initial Cost/Usage Limit)

and it is added to  Accumulated Depreciation.

The net book value is calculated as follows:
Net Book Value = Initial Cost - Accumulated Depreciation

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Sales of fixed assets are registered by creating the following documents: Accounting > Fixed Assets > Fixed Asset Sales. For details, refer to Fixed Asset Sales.

At the period of sales the asset's net book value is the difference between the initial cost and the accumulated depreciation.

Note. If the sale occurs before the end of the month date, you can manually run the depreciation calculation for the current month by clicking the Calculate Depreciation button on the toolbar of the Fixed Asset Sales (create) form.

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Sale transaction debits the cash account (or Receivables) for the amount received, debits the Accumulated Depreciation account, credits the Fixed Asset account and debits/credits the Fixes Asset Sales account.

Example
The organization purchased a machine with useful life of 5 years for $4000 on June 1, 2015. The machine was depreciated by using the linear depreciation method, each year by $800. Then, the organization decided to sell the asset on June 2018 for $3000 in order to raise cash for the purchase of a new machine. At the moment of sale, the net book value of the machine is 1600.

The sale transaction generates the following journal entries:

Writing off the Fixed Assets

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Writeoffs of fixed assets are registered by creating the following documents: Accounting > Fixed Assets > Fixed Asset Write Offs. For details, see Fixed Asset Write Offs.

A fixed asset writeoff involves reversing of both the recorded cost of the fixed asset and the corresponding amount of accumulated depreciation. Any remaining difference between the two is recognized as either a gain or a loss. Proper fixed asset writeoffs ensure that the balance sheet correctly reflects the assets actually owned by the entity.

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If the asset is fully depreciated, writeoff debits all accumulated depreciation and credits the fixed asset GL Accounts.

Example

The organization purchased a woodworking machine with useful life of 4 years for $2000 on June 1, 2015. The machine was depreciated by using the linear depreciation method during 3 years and 6 months. Then, the machine was damaged beyond repair. The organization wrote off the machine. At the moment of writeoff, the net book value of the machine was 1750.

The writeoff document generates the following journal entries:

Viewing the Fixed Assets Documents

To find all the documents related to a particular fixed asset, go to: Accounting > Fixed Assets > Fixed Asset Documents. Using this form, you can filter all the fixed asset documents by document type, particular fixed asset or both. Also, you can search the document by inventory number or a string in the fixed asset description.  For more information, see Fixed Asset Documents.

Reporting Fixed Assets on Financial Statements

Your organization must show both tangible and intangible assets on your balance sheet, with tangible assets listed first. For details, refer to[ to Financial Statements|ed6799d9-bbad-44dc-8a8e-47a7ae82d7c0].

For managing fixed assets, you can use the following reports in the Accounting module:

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For more information on details, refer to Accounting Reports.