Fixed Assets & Depreciation User Guide

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Version: 1.0.0
Last Updated: 2026-01-28
Module: FA (Finance & Accounting)
Status: Active

Purpose: This guide helps end users understand how to use Fixed Assets & Depreciation for tracking capital assets, calculating depreciation, and managing asset disposals.

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Overview

The Fixed Assets module (FA-11) enables organizations to track capital assets, calculate depreciation, and manage asset disposals. This ensures accurate balance sheet presentation, proper depreciation expense recognition, and compliance with GAAP requirements.

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Key Capabilities

• Asset Register: Track all capital assets with purchase details, location, and depreciation configuration
• Automated Depreciation: Calculate monthly depreciation using straight-line or declining balance methods
• Disposal Management: Record asset sales, scrapping, or donations with gain/loss calculations
• Location Tracking: Transfer assets between sites and maintain location history

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Who Should Use This Guide

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Prerequisites

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Permissions Required

To use Fixed Assets, you need:

Note: Contact your organization administrator if you don’t have the required permissions.

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Getting Started

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Accessing Fixed Assets

1. Navigate to Finance in the main menu
2. Click Fixed Assets in the sidebar
3. Select Asset Register to view all assets

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Understanding the Interface

The Asset Register displays all capital assets with:

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Common Tasks

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Creating a Fixed Asset

When to use: When acquiring new capital equipment above the capitalization threshold ($5,000 default) Steps:

1. Navigate to Finance → Fixed Assets → Asset Register
2. Click Add Asset in the top right
3. Fill in the required fields:
   • Asset Name: Descriptive name for the asset
   • Category: Select from vehicle, equipment, furniture, building_improvement, land, leasehold_improvement, or other
   • Purchase Date: Date of acquisition
   • Purchase Cost: Original cost
   • Depreciation Method: Straight-line, Declining Balance, or None
   • Useful Life: Number of years
   • Salvage Value: Estimated value at end of useful life
4. Click Create Asset

Result: Asset is created with an auto-generated tag and appears in the Asset Register.

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Running Monthly Depreciation

When to use: At the end of each month to calculate depreciation for all active assets Steps:

1. Navigate to Finance → Fixed Assets → Depreciation
2. Click Run Depreciation
3. Select the Depreciation Month
4. Review the preview of assets to be processed
5. Click Run to calculate

Result: Depreciation records are created for each active asset with amounts calculated based on their depreciation method. Tips:

• Run depreciation after the fiscal period is open but before closing
• Review any “Pending” GL postings if journal entries weren’t created

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Recording an Asset Disposal

When to use: When selling, scrapping, or donating an asset Steps:

1. Navigate to the asset detail page
2. Click Dispose Asset
3. Fill in disposal details:
   • Disposal Date: When disposal occurred
   • Disposal Method: Sale, Scrapped, Donated, or Other
   • Disposal Proceeds: Sale amount (if applicable)
   • Disposal Reason: Why the asset was disposed
4. Review the calculated Gain/Loss
5. Click Confirm Disposal

Result: Asset status changes to “Disposed” and a disposal record is created.

Note: Gain = Proceeds > Book Value; Loss = Proceeds < Book Value

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Transferring an Asset Location

When to use: When moving an asset to a different site or building Steps:

1. Navigate to the asset detail page
2. Click Transfer Asset
3. Select the new Site, Building, and Room (optional)
4. Enter a Transfer Reason
5. Click Transfer

Result: Asset location is updated and transfer history is recorded.

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Key Concepts

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Depreciation Methods

Straight-Line:

• Formula: (Cost - Salvage) / Useful Life / 12
• Equal monthly depreciation
• Best for assets with steady utility decline

Declining Balance:

• Formula: Book Value × (Rate / 12)
• Higher early-year depreciation
• Rate typically 2x straight-line rate

None:

• Asset is not depreciated
• Use for land, art, or non-depreciating assets

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Asset Status

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GL Posting Status

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Tips and Best Practices

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Do’s

• ✅ Review asset details before confirming disposal
• ✅ Run depreciation before closing the fiscal period
• ✅ Use consistent naming conventions for assets
• ✅ Keep serial numbers and vendor information up to date
• ✅ Periodically reconcile asset register to physical inventory

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Don’ts

• ❌ Don’t dispose assets without proper authorization
• ❌ Don’t skip monthly depreciation runs
• ❌ Don’t create assets below the capitalization threshold

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Troubleshooting

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Issue: GL Posting Pending

Symptoms: Depreciation records show “Pending” status Cause: General Ledger integration is processing or temporarily unavailable Solution:

1. Wait for automatic retry (system retries periodically)
2. Check GL module status
3. Contact administrator if issue persists

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Issue: Asset Not Depreciating

Symptoms: No depreciation calculated for an asset Cause: Asset may not be eligible for depreciation Solution:

1. Verify asset status is “Active”
2. Verify depreciation method is not “None”
3. Verify book value > salvage value
4. Verify purchase date is before depreciation month

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Issue: Cannot Dispose Asset

Symptoms: Dispose button disabled or error on disposal Cause: Missing permission or asset already disposed Solution:

1. Check you have fa.assets.dispose permission
2. Verify asset status is “Active” or “Retired”
3. Contact administrator for permission issues

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Related Documentation

• FA-01: Chart of Accounts - GL accounts for assets
• FA-02: General Ledger - Depreciation journal entries
• FA-04: Purchase Orders - Create assets from POs
• FM-05: Facilities - Operational asset tracking

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Glossary

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Last Updated: 2026-01-28
Questions? Contact your organization administrator.