Fixed Asset Register Setup

Before adding an Asset Group to the Fixed Asset Register it is advisable to add all accounts needed for Asset Group setup

• Examples of major groups of Fixed Assets:
  
  • Land (or Land & Buildings)
  • Buildings
  • Plant & Machinery (or Plant & Equipment)
  • Motor Vehicles
  • Furniture & Fixtures
  • Office Equipment

 

Step 1: Setting Up Accounts for Asset Groups

• For each Asset Group you must have the following corresponding accounts setup in the Chart of Account:
  
  1. Depreciation account (Land is not a depreciating asset - no account needed for Land)
  2. Asset account
  3. Accumulated Depreciation account (Land is not a depreciating asset - no account needed for Land)
  4. Profit on Sale of Assets account (This account can be used for all Asset Groups)
  5. Revaluation of Assets account  (This account can be used for all Asset Groups)

 

For this example we will setup the accounts needed for the Asset Group Plant & Equipment

Part A: Depreciation Accounts

• Click the Chart toolbar icon
• Click on Expense tab
• Scroll down and see if there is already a Depreciation expense account. Cashbook Connect comes with a standard chart for account classification. This can be added to or modified to suit the user's requirements.
  

 

iv. If you have more than one type of Asset Group, it may be worth creating Depreciation sub-accounts.

v. Click Add

For this example we will create a Depreciation expense account for Plant & Equipment.

• Account Code: eg. 117.01 (Note: sub-accounts must start with the same code as the main or control account. Main account is 117 Depreciation)
• Tick Sub-Account of check box
• Sub-Account of: 117 (Main account)
• Description: eg. Depreciation-Plant & Equipment 
• Account Type: Operating Expense
• GST Category: 10. Non-reportable Payments (Note: If the GST Category is grey out. Click on the BAS icon. Click on the Setup tab. In the General section, tick the Activate GST in Cashbook Plus! check box.- for new users)
• Tick the Non-Cashbook Account (e.g. Depreciation) check box
• Click  OK to save

• Other Depreciation expense accounts can be set up at the same time

For example:

 

Part B: Asset Accounts and Accumulated Depreciation (contra-asset) Accounts

• Still in Chart list, click on the Assets tab
• Some asset and accumulated deprecation accounts may already have been created.  (Cashbook Connect comes with a standard chart for account classification. This can be added to or modified to suit the user's requirements.)
  

For this example we will create a Asset account for Plant & Equipment

• Click Add
• Account Code: eg. 410
• Description: eg. Plant & Equipment 
• Account Type: Asset
• GST Category: 08. Capital Acquisition
• Click OK to save

• Click Add
• Account Code: eg. 411
• Description: eg. Accum Deprec-Plant & Equipment 
• Account Type: Asset
• GST Category: 10. Non-reportable Payments
• Click OK to save
  

• Other Asset and associated Accumulated Depreciation accounts can be set up at the same time

Part C: Profit on Sale of Assets

• Still in Chart list, click on the Income tab
• Click Add
• Account Code: eg. 99
• Description: Profit on Sale of Assets
• Account Type: Other Income
• GST Category: 11. Non-reportable Receipts
• Tick the Include in Income Tax Return/Tax Report check box
• Tick the Non-Cashbook Account (e.g. Depreciation) check box
• Click OK to save
  

Part D: Revaluation of Assets Account

• Still in Chart list, click on the Equity tab
• A Revaluation of Assets account may already exist.  (Cashbook Connect comes with a standard chart for account classification. This can be added to or modified to suit the user's requirements.)
• Click Add
• Account Code: eg. 810
• Description: Revaluation of Assets
• Account Type: Equity
• GST Category: 11. Non-reportable Receipts
• Click OK to save
  

Step 2: Add Asset Groups to the Fixed Assets Register

• Click Registers
  
• Fixed Assets menu option
  

• Description: e.g. Plant & Equipment
• Depreciation account: e.g. 117.01 Depreciation - Plant & Equipment (created above)
• Asset Account: e.g. 410 Plant & Equipment (created above)
• Accumulated Depreciation account: e.g. 411 Accum Deprec-Plant & Equipment (created above)
• Profit on sale of assets account: e.g. 99 Profit on Sale of Assets (created above)
• Revaluation account: 810 Revaluation of Assets (created above)
• Enterprise: optional
• Valuation opening balance: auto fill
• Valuation current balance: auto fill
• Valuation method: seek advice and direction from your accountant
• Management depreciation rate: seek advice and direction from your accountant

1. Prime Cost - used to depreciated assets by equal amounts each year over its effective life
2. Diminishing Value - uses a percentage to calculate depreciation. i.e. the value of a depreciating asset decreases more it the early years of its effective life

Note:  It is strongly advised you contact your accountant for help in which method you should use and what depreciation rate to allocate to each asset group. Your accountant can look at how your business operates to determine which method is appropriate. Also consult your accountant as to when to depreciate your assets, e.g. at the end of the financial year

• Click OK to save

• Repeat this process of allocation for each asset group you add

• Click on the following link to Add Assets to the Fixed Asset Register.