Manage fixed assets
Books, groups, and profiles
The fixed asset group supplies defaults - books, service life, depreciation convention, asset group type - and links to a posting profile that maps each transaction type (acquisition, acquisition adjustment, depreciation, write-up/write-down, disposal) to ledger accounts. Each book holds a depreciation profile (method plus rounding), service life, convention, calendar, and depreciate/hold flags. Traps: posting profile accounts must be of the Fixed assets account type; a book with Depreciate set to No is still valid for tax-style reporting; a capitalization threshold blocks small acquisitions from becoming assets.
Depreciation methods and conventions
Methods include straight line life, straight line remaining life, reducing balance (with a factor, where 200 equals double declining), sum-of-the-years' digits, manual, factor, and consumption. Conventions - half-year, full-month, mid-month, mid-quarter - determine when depreciation starts and ends, and apply to both acquisition and disposal.
Transactions
Acquisitions and adjustments run through fixed asset journals; depreciation is proposed, journal created, then posted. Transfers change the asset structure or dimensions without changing cost. Disposal is either Sale or Scrap; run depreciation up to the disposal date first, or the catch-up posts against disposal accounts and distorts the gain/loss.
Worked example
Cost 10,000, five-year life, straight line, half-year convention: year 1 = 10,000 / 5 × 1/2 = 1,000; years 2–5 = 2,000 each; year 6 = 1,000. Switch to full-month with an in-service date of 15 March and depreciation begins 1 March.
Rule of thumb: reducing balance always applies the rate to net book value; straight line remaining life divides remaining NBV by remaining periods.