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As a fixed asset is in use, its value will decline over time. Depreciation is the process of allocating an asset's cost over the course of its useful life. Notice that generally most of tangible assets are depreciated except for land that is never depreciated. Some of the intangible assets are not depreciated because they may have unlimited useful lives with their values not declining over time.
FirstBIT FirstBit ERP provides the functionality that allows you to account for the fixed assets from their purchase or construction to disposal.
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To enable the Asset Management module and the fixed asset accounting functionality, select the Enable Fixed Asset Accounting option on the Administration > Configuration Settings Settings > Asset Management form.
If you need to use non-current asset classes, select the Enable Non-Current Asset Classes option on the same form.
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Different documents are used to register different stages of fixed asset life cycle.
Brief description descriptions of handling different stages are contained in the sections below.
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Deployment of some assets may involve delivery, assembling of the items, and training of the personnel. These The costs of these services can be recorded using the Purchasing > Purchase Purchasing Documents > Additional CostsExpenses documents.
If it is planned that the asset will be constructed, you can manually change the New status of the fixed asset to Construction in Progress. Costs of any materials and construction works must be recorded to Construction in Progress GL account. Once the fixed asset is ready to use, you can manually change the status to Construction is Completed.
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To add a new fixed asset to accounting, go to: Asset Management > Fixed Asset Documents > Fixed Asset Entries. In this document, for the specified fixed fixed asset, you can list the inventory items that will be used as the fixed asset or specify only the construction costs if the fixed asset was constructed.
A fixed asset may be composed of multiple inventory items. You can create one fixed asset for specific quantity of the inventory item, or you can create a separate fixed asset for each unit of the specified quantity of the item. For example, a fixed asset Conference Room Chairs may include multiple chairs used in a conference room. Alternatively, you can consider each chair as a separate fixed asset. Also, you can associate multiple items of different types with a single fixed asset. For example, a warehouse fixture may include multiple racks and shelves purchased separately.
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The fixed asset, once conservation is cancelled, will be depreciated. The duration of useful life is not changed, ; however, it is just divided into the interval before conservation and the interval after cancellation of this conservation. The depreciation calculation will be resumed. For more information, refer to Conservations of Fixed Assets.
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If you need to make specific preparations before you can sell the fixed assets, you create a Preparation for Fixed Asset Sale document which involves moving the fixed asset from the balance sheet , to a specific GL account (by default, Held for Sale). On posting the document, the asset's status changes to Held for Sale, and depreciation is not calculated.
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