Generally, fixed assets are the property with a useful life greater than one month, often more than one year. Fixed assets are not purchased for immediate resale or as materials for production, they are intended by the entity for usage in production or other business activities.
Here are some categories of fixed assets:
- Buildings
- Computer equipment
- Computer software
- Furniture and fixtures
- Machinery
- Vehicles
Also, you can use intangible assets. For available types of operations with fixed assets, see Overview of Fixed Asset ManagementAccounting.
Generally, fixed assets appear on the balance sheet in the Property, Plant, and Equipment (PP&E) section.
In this section
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Accepting to Accounting
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- Initial Cost
- Whether the asset will be depreciated
- Which depreciation method will be used: Linear or Units of Production.
...
Changing the Accounting Parameters for Fixed Assets
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- Initial Cost
- Whether the asset will be depreciated
- Depreciation method
- GL Accounts
- Business activity
- Expense Item
...
Using the Linear Depreciation method
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Using the Units of Production Depreciation method
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- UOM in which usage will be measured.
- Usage Limit which sets up the maximum usage recommended for the asset.
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Selling the Fixed Assets
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GL Account | Debit | Credit |
Accumulated Depreciation | 2400 |
|
Fixed Asset |
| 4000 |
Receivables | 3000 |
|
Fixed Asset Sales |
| (3000-1600) = 1400 |
Writing off the Fixed Assets
...
GL Account | Debit | Credit |
Accumulated Depreciation | 1750 |
|
Fixed Asset |
| 2000 |
Expense | 250 |
|
Viewing the Fixed Assets Documents
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Reporting Fixed Assets on Financial Statements
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- Inventory Card: Using this report, you can view the net book values of fixed assets with some details of depreciation. You can filter the data by entity, status, department, specific fixed assets.
- Fixed Assets Output: The report lists the fixed assets with the Units of Production depreciation method. For each such fixed asset, the output in the specified units of production during the selected period is shown.
- Statement of Depreciation: The report lists the fixed assets grouped by department with the details of depreciation. You can filter the data by entity, department, and specific fixed assets.
For more information on details, refer to Accounting Reports.
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