Fixed Asset (FA) with Accumulated Depreciation

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Fixed asset (or long term asset) are acquired to generate future income in a company. A vehicle bought to transport goods to customer forms part of the fixed asset to generate revenue for the company, over more than a one financial periods (10 years), at the same time the cost on each year is apportioned by the full value, to the number of estimated useful life of the asset (the vehicle) to match the revenue, thereby arriving at the profit earned by the company.

 

A simple example is if a transport vehicle is bought for SGD10,000 to be used over a 10 year period, the cost per year to the company will be SGD1,000.00, against the revenue earned as service rendered to deliver goods to the customers.

 
Fixed asset account is a unique account that requires a corresponding accumulated depreciation account, presented side by side in the balance sheet for the purpose of working out the net book value of the fixed asset. (see below)

 

Assuming below is your Balance Sheet showing your Fixed Assets group total.

 

: Link Accumulated depreciation account to Fixed Asset Accounts for Balance Sheet presentation

 


At [Setup], click on Chart of Accounts

 

 

 

Below shows a sample of the fixed asset (A00) and accumulated depreciation account (B00) that is already pre-set . (See Fixed assets with data id)

 

 

 

 

Take note that the Accumulated Depreciation account (B00) is a "buddy" account that need to link to the fixed asset account (A00)

 

To create a new Fixed Asset with  Accumulated Depreciation accounts ...Read more...

 

             

 

 
Once complete , a new fixed asset is created. See Fixed Asset Register
 
 

 

 

 

This is for the purpose of presenting net book value of the fixed assets in your Balance Sheet as shown below

 

 

LONG TERM ASSETS :

[A00]COST

Acc.Depn[B00]

NetValue

Furniture & Fittings

50,000.00

30,000.00

20,000.00

Computers & Comm Equipments

20,000.00

15,000.00

5,000.00

Renovation & Refurbishments

 

 

 

Motor Vehicles

 

 

 

Property, plant & equipments

 

 

 

TOTAL LONG TERM ASSETS

70,000.00

45,000.00

25,000.00

Next, proceed to Getting Started topic to Step 2/11 Group Master or back to Fixed Asset Register Getting Started


 

Related Topics

Getting started : Fixed Assets Register 11 Steps to getting FA started

 

General ledger Journal Monthly depreciation adjustments

 

FAQ : Balance Sheet report without Acc Depreciation

 

FAQ : Why I cannot delete a chart of accounts code?

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http://realtimme.cloudapp.net/basic/index.html?fixed_asset_with_acc_depreciat.htm