Create fixed assets

To create a fixed asset record

Open: Nominal Ledger > Fixed Assets > Enter New Asset.

  1. Enter a unique Code for the asset.
  2. Enter a Description for the asset.
  3. Enter the asset's Initial value. This cost price is used to calculate the depreciation amount for straight line depreciation.
  4. Select the asset purchase date in Date acquired.
  5. The Last depreciated date is updated by the system when the asset depreciation is posted.
  6. When you are creating the asset this will be blank.

    If the asset you are entering has already been depreciated outside Sage 200cloud you need to enter the date it was last depreciated.

    The date can be in this financial year or any prior year but must be later than the Date acquired.

    Note: If your Depreciation method is Period Straight Line or Period Reducing Balance, you cannot depreciate the asset again during the period shown in the Last depreciated date. If it is Annual Straight Line or Annual Reducing Balance, you cannot depreciate the asset again during the year shown in the Last depreciated date.

  7. Enter the Depreciation Details:
  8. Depreciation method

    You can measure depreciation by Period or Annually. The methods are either Straight LineStraight line depreciation is normally used if you forecast that the use of the asset is spread evenly across the time period of its use. The asset's value is reduced by a percentage value based on the initial value, the residual value and the asset life span in years or periods. The value of depreciation remains the same each time. or Reducing BalanceReducing balance depreciation is normally used if you expect an asset to wear out quickly. The asset's value is reduced by a percentage of the Net Book Value which reflects the asset's current worth, every year or period until it is reduced to a realistic scrap or write off value..

    Net book value

    Enter the current book value. If the asset is new, this will be the same as the Initial Value. If it has already depreciated, change this to show the current value (i.e. Initial Value less depreciation).

    Balance sheet

    Select a Balance Sheet account for depreciation postings.

    Note: This must already exist in the Nominal Ledger.

    • If you select the account which holds the asset value, you will see the reduced value when depreciation is posted.
    • If you select a separate account for depreciation, you will see the amount depreciated in this account.

    When an asset is depreciated, the value of the depreciation is added to this account as a credit.

    Profit and Loss

    Select a Profit and Loss account for depreciation postings.

    Note: This must already exist in the Nominal Ledger.

    When an asset is depreciated, the value of the depreciation is added to this account code as an expense to the company as a debit posting.

    Residual value

    Straight Line Only: This is the value that you estimate would be the sale value at the end of the asset's life.

    Asset life span

    Straight Line Only: Enter the expected life span of the asset.

    This should be the entire life span of the asset from when it was bought or acquired.

    If you are depreciating by period, enter the life span in periods. If you are depreciating annually, enter the life span in years.

    Annual percent

    Period percent

    Reducing Balance Only: Enter the percentage depreciation rate to apply.

    • Annual Reducing Balance: The Annual percent rate will be applied each year.
    • Period Reducing Balance: The Period percent rate will be applied to each period.

      This percentage is applied to the remaining value of the asset each period, so take this into consideration when you work out the percentage to use. For example, say you want to depreciate an asset by 50% over 5 periods, you would need to use a rate of around 12.94%. But if you set this to 10%, it would only depreciate the asset by around 41% over 5 periods.

      To calculate the Period percent for a set number of periods:

      1. Click the % button, next to Period percent.
      2. Enter the Total percent to depreciate, and the Number of periods over which it will be depreciated. The Result shows period percentage rate.

        For example, if you set the total percent to 50% and number of periods to 5, that would give a rate of 12.94%.

      3. Click OK to use this percentage rate.
  9. You can also enter additional details about the asset.

    These are all free text, and any details you enter can be quickly selected again from a list when you enter other fixed assets.

    Manager

    Enter the name of the employee who is registered to use the asset.

    Location

    Enter the location of the asset.

    Analysis 1

    Analysis 2

    Analysis 3

    Enter any information that you want to record for the asset in the Analysis boxes.
  10. Click Save.

When is a fixed asset 'active'?

You can create fixed asset records by adding some information initially and filling in the details later. Fixed assets don't become active until all the Depreciation details have been entered. An asset cannot be depreciated or disposed of until it is active.

Note: You can also import fixed assets.

There are two main depreciation methods to choose from: straight lineStraight line depreciation is normally used if you forecast that the use of the asset is spread evenly across the time period of its use. The asset's value is reduced by a percentage value based on the initial value, the residual value and the asset life span in years or periods. The value of depreciation remains the same each time. or reducing balanceReducing balance depreciation is normally used if you expect an asset to wear out quickly. The asset's value is reduced by a percentage of the Net Book Value which reflects the asset's current worth, every year or period until it is reduced to a realistic scrap or write off value.. Each of these can be applied annually or each period.

What is required to make the asset active?

All fixed assets require:

  • Depreciation method
  • Net book value
  • Balance sheet account
  • Profit and loss account

For Straight Line Depreciation method, you also need to set:

  • Residual value
  • Asset life span

For Reducing Balance Depreciation method, you also need to set:

  • Depreciation percent