Fixed assets

The Fixed Assets register (menu: Accounting → Fixed Assets) tracks your long-lived assets — equipment, vehicles, furniture, software, trademarks, goodwill — and posts depreciation automatically. It handles the full lifecycle: register, depreciate each period, edit safely, and dispose with a correct gain or loss.

Two categories

There are two categories, treated identically except for terminology and the accounts used:

• Tangible — physical assets like equipment and vehicles (depreciation).
• Intangible — non-physical assets like software licences, trademarks, and goodwill (amortization). Restricted to straight-line (or no amortization) per IAS 38, because amortization must be systematic.

An intangible with an indefinite useful life (e.g. goodwill that isn’t being amortized) uses No depreciation — it stays at cost on the balance sheet and is reviewed for impairment instead.

How depreciation works (the short theory)

Depreciation spreads an asset’s cost over the periods that benefit from it — the matching principle. Rather than expensing a $12,000 machine all in the month you buy it, you charge a little to the P&L each month as the asset is used up.

Three numbers drive everything:

• Depreciable base — the amount you’ll eventually write off. It’s cost − salvage, or cost limit − salvage when you set a cost limit (see below).
• Accumulated depreciation — the running total of all depreciation charged so far (held in a contra-asset account that reduces the asset on the balance sheet).
• Net book value (NBV) — cost − accumulated depreciation. This is the asset’s current carrying amount; it falls each period toward the salvage floor.

The final period is always clamped so accumulated depreciation lands exactly on the depreciable base — no rounding residue, no over-depreciation.

Asset types

An asset type is a label you use to categorize assets — Computer Equipment, Motor Vehicles, Trademarks, Office Furniture. Types are optional but make the register easy to scan and group.

You don’t have to set types up in advance. On the register or edit form, the Asset type field is a search box: start typing to filter existing types, or type a brand-new name and choose Create as a new asset type. The new type is added on the fly with neutral defaults (straight-line, full-month) and selected immediately — no trip to settings required.

Types can carry defaults

Each type can optionally store a default depreciation method, rate, useful life, and set of posting accounts. When you pick such a type while registering an asset, those values pre-fill the form — so every “Laptop” can depreciate the same way with one click. The defaults are optional; a type can be a pure category with nothing filled in.

Manage types under Fixed Assets → Settings → Manage Asset Types. The list shows each type’s category, method, a live count of how many assets use it, and an active/inactive status, plus summary stats at the top (totals, tangible vs. intangible, categorized assets). You can add, edit, activate/deactivate, or delete a type — deletion is blocked while assets still reference it (remove the category from those assets first).

Register an asset

Fixed Assets → Register Asset. The form has several sections:

Section	Fields
Asset Details	Asset type (search or create — see above), Name, Reference/code, Category, Description
Cost & Depreciation	Purchase date, Purchase price + Currency, Salvage value, Cost limit, Depreciation start date, Useful life (yrs), Rate, Depreciation method, Averaging method
Posting Accounts	Asset (cost) account, Accumulated depreciation/amortization account, Depreciation/amortization expense account — all must be distinct
Capitalization	Post the acquisition cost to the ledger (off by default) + the Funded by credit account

A few fields worth explaining:

• Currency — the purchase price can be in any enabled currency. If it differs from your org’s base currency, you’ll be prompted to confirm the exchange rate; depreciation is then posted in the asset’s own currency.
• Cost limit — a ceiling on the depreciable amount, for when only part of the cost is eligible to depreciate (e.g. a tax capitalization threshold). Leave it blank to depreciate the full purchase price. It can’t exceed the purchase price, and the un-depreciated residual (purchase price − cost limit) stays on the books at the end.
• Depreciation start date — when the asset enters service. Leave it blank to use the purchase date (the usual case). It can’t be before the purchase date.
• Averaging — Full month gives a whole month’s charge regardless of the day you acquired it; Actual days prorates the first month by the eligible days.

Capitalization

When Post the acquisition cost to the ledger is on, registering also posts Dr Asset (cost) / Cr Funding account immediately — the asset lands on your balance sheet the moment you create it. The Funded by account is the cash, payable, loan, or equity account that paid for it.

Capitalization is off by default. Turn it on when you’re paying for the asset directly from a bank or loan account. Leave it off if you capitalize through a bill or spend-money instead — the asset will be recorded on the register, but you’ll post the cost entry yourself.

Capitalization is recommended

Turning capitalization on at registration is what makes the disposal flow balance cleanly later (there’s a cost entry to remove). You can still dispose without it, but you’ll record the disposal as a manual journal.

The asset starts in Registered status. A fully depreciated asset flips to that status automatically once depreciation reaches the salvage floor; a disposed asset moves to Disposed.

Edit an asset

Open any asset and click Edit to change its details. What you can edit depends on whether depreciation has run yet:

• Before depreciation — everything is editable: cost, method, rate, useful life, accounts, dates, currency. Use this to correct a misregistered asset before you post anything.
• After depreciation has run — cost, method, accounts, and dates are locked, because journals have already been posted against them. You can still edit the name, reference/code, description, and re-categorize the asset type (the type is just a label, so it’s always safe to change). To unlock the rest, reverse the posted depreciation through the disposal flow.

This lets you fix typos and re-categorize freely without risking an inconsistency between the register and the ledger.

Depreciation methods

Method	How it works
No depreciation	Book value stays at cost (use for indefinite-life intangibles or land)
Straight line	(depreciable base) / useful life / 12 per month. Requires a useful life.
Declining balance	Charges against current net book value. Requires an explicit rate (e.g. 25%).
Declining balance (150%)	Rate = 1.5 / useful life, with optimal switch to straight-line
Declining balance (200%)	Rate = 2.0 / useful life (double-declining), with optimal switch to straight-line
Full at purchase	Entire depreciable base charged in the acquisition month

For the declining-balance methods with a useful life, AccountFUN applies the standard optimal switch to straight-line: each period it takes the larger of the declining-balance charge and the straight-line charge over the remaining life, so the asset fully depreciates by the end of its stated life rather than asymptotically approaching salvage. Salvage is always a floor — book value never drops below it.

Run depreciation

Click Run Depreciation (optionally scoped to the current category tab) and pick an as-of date. AccountFUN posts the depreciation journal (Dr Depreciation Expense / Cr Accumulated Depreciation) for every eligible asset, catching up all missing months up to that date.

A few important behaviors:

• Pre-flight validation. If any eligible asset has a bad config (incompatible accounts, missing useful life), AccountFUN posts nothing and reports every problem — so a misconfigured asset can’t quietly corrupt the run.
• Requires a depreciation start month (set under Fixed Assets → Settings → Depreciation Start Month). This is an org-wide floor: charges only begin from the first day of that month, even for assets bought earlier. Each asset’s own depreciation start date (or purchase date) determines its month-by-month eligibility on top of that.
• Idempotent. Re-running the same as-of date posts nothing new — each period is recorded once with a unique (asset, period) key.
• Per-asset atomicity. Each asset depreciates in its own transaction, so one locked-period failure won’t roll back the assets already posted.
• Locked periods are respected. A period on or before the org lock date is skipped with a clean error.

Each posted period writes an immutable schedule row (period, charge, accumulated, book value, journal link) shown on the asset’s detail page.

Depreciation journals can’t be voided directly

Once depreciation has run, the asset’s depreciation-affecting fields are locked. To undo depreciation, reverse it through the disposal flow, not by editing the asset or voiding the journal — see Manual journals for why these journals are protected.

Dispose of an asset

When you sell, scrap, or retire an asset, click Dispose (available on Registered or Fully Depreciated assets). Enter:

• Disposal date
• Proceeds received (default 0 for scrap/donation)
• Proceeds account (the cash/receivable account that received the money)
• Gain on disposal account (income) and Loss on disposal account (expense)

AccountFUN posts the textbook derecognition entry — removes the accumulated depreciation and the asset at cost, records the proceeds, and books any gain (proceeds > net book value) or loss (proceeds < net book value) to the accounts you chose. The asset moves to Disposed with book value zero.

Best with capitalization on

Disposal works most cleanly for assets capitalized through the register (so there’s a cost entry to remove). If you skipped capitalization, record the disposal as a manual journal instead.

Worked example: a laptop over 3 years (tangible)

You buy a laptop for $1,800 and depreciate it straight-line over 3 years, $0 salvage.

1. Register Asset: type Computer Equipment (template: straight-line, 3 yrs, accounts 720/711/416). Purchase price $1,800. Turn capitalization on, funded by Business Checking. → Posts Dr Computer Equipment $1,800 / Cr Bank $1,800. Book value $1,800.
2. Each month, Run Depreciation posts Dr Depreciation $50 / Cr Accumulated Depreciation $50 (1800 / 36). After 24 months: accumulated depreciation $1,200, book value $600.
3. At month 30 you sell the laptop for $300. Dispose: proceeds $300, proceeds account Bank, gain/loss accounts as configured. Net book value at disposal = $300 (cost $1,800 − accumulated $1,500). Proceeds ($300) = book value ($300), so no gain or loss. Asset → Disposed.

Had you sold it for $450 instead, AccountFUN would book a $150 gain to your gain-on-disposal income account. Sell for $150, and it books a $150 loss.

Worked example: trademark registration costs (intangible / amortization)

You spend $24,000 on legal and filing fees to register a trademark. It has a finite useful life of 10 years. Because it’s intangible, it’s amortized (the intangible equivalent of depreciation) on a straight-line basis.

1. Register Asset: category Intangible, type Trademarks (template: straight-line, 10 yrs, accounts 740 Trademarks / 741 Accumulated Amortization / 417 Amortization Expense). Purchase price $24,000, salvage $0. Turn capitalization on, funded by Bank. → Posts Dr Trademarks $24,000 / Cr Bank $24,000. Book value $24,000.
2. Each month, Run Depreciation posts Dr Amortization Expense $200 / Cr Accumulated Amortization $200 (24000 / 120). After 12 months: accumulated amortization $2,400, book value $21,600. After 10 years the trademark is fully amortized and flips to Fully Depreciated.

A few intangible-specific notes:

• Salvage is usually $0 for intangibles, unless a third party has committed to buy it at the end of its life (rare).
• Indefinite-life intangibles (e.g. goodwill you’ve elected not to amortize) use No depreciation — they stay at cost and are impairment-tested instead.
• The accounts mirror the tangible setup: an Intangible Asset (cost) account, an accumulated amortization contra-asset, and an amortization expense account. AccountFUN defaults the contra-asset to the system accumulated-amortization account when you leave it blank.