Asset Register Categories

This page lets you define categories for use in the asset register and set defaults for assets contained within it to manage depreciation and nominal codes. Access this page by going to Settings > Asset Register Categories.

By default we set you up a default category to use with your fixed assets named ‘General Assets’.

Adding a new category

To add a new asset register category go to Settings > Asset Register Categories > Create Category link.

On the next page you can set up your category;

  • Name – Use this text box to give your category a name. This should be quite descriptive, for example “Computer Equipment”
  • Description – Use this text box to write a short description of what will be contained in this category.
  • Depreciation method – Use the two options here to define the default deprecation method.
    • Straight line –This deducts the same amount every year. The two critical factors are the useable life and the salvage value (an estimate of an items value at the end of the depreciation).
      • Example: An example is a computer costing £1,200 with 3-year useable life.This will depreciate in value by £400/year.
    • Reducing balance – This deducts a variable amount of depreciation over the life of the asset. This is usually used for items that have a high usage in the early part of their life. The amount of depreciation then reduces as the life of the asset progresses.
      • Example: An example is a bit of machinery that has a useful life o 3 years and cost £4000. The salvage value (estimate of worth at the end of its life/depreciation) is £300. The rate of depreciation is 50%.
        • Year 1 – £4000 – £300 x 50% = £1850 depreciated
        • Year 2 – £2150 – £300 x 50% = £925 depreciated
  • Depreciate by – Enter in the annual percentage rate that assets within this category should depreciate by.
  • Depreciate every – Enter in how often (in months) that this asset should depreciate by.
  • Balance Sheet – Enter in the nominal code where the assets depreciated value should be journaled. It’s highly advisable that you set up another nominal code for depreciation in Settings > Chart of Accounts if you’ve not already done that.
  • P&L Code – This is the code that will be debited when a journal is created for the depreciation and will appear on your profit and loss report (as a loss). If you’ve not already got a code set up for this then you should set this up in Settings > Chart of Accounts. This should be different from the balance sheet code that you’ve previously set above.

If you’re not sure on any of these settings we advise you speak to your accountant, as the settings here will impact on your financial reports such as balance sheet and profit & loss report.

When you’re ready, click the Create Category button.

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