Fixed assets

Fixed Assets is where a company tracks long-lived assets and their depreciation inside LedgerHQ. Use it when an asset should be capitalized instead of posted as an ordinary expense.

The fixed asset workflow is intentionally accounting-focused: create the asset, confirm its linked accounts and depreciation settings, post depreciation when due, and dispose of the asset when it is sold, retired, or removed from service.

Create An Asset

Create a fixed asset when the company buys equipment, furniture, vehicles, leasehold improvements, or other capital assets that should be depreciated over time. The asset record should include enough detail for later review: name, purchase date, cost, useful life, depreciation method or frequency where available, linked asset account, accumulated depreciation account, and depreciation expense account.

If the purchase was originally posted from Bank Feeds or a journal entry, keep the source record in mind. The fixed asset record should agree with the ledger entry that capitalized the asset.

Monthly And Annual Depreciation

LedgerHQ supports monthly and annual depreciation frequencies. Monthly depreciation is the default for assets that should affect each month of financial statements. Annual depreciation posts a year-end entry for the full year and is useful when the firm handles fixed asset depreciation during annual cleanup rather than monthly close.

Annual depreciation should be used intentionally. It keeps monthly statements simpler, but it means interim reports may not include depreciation expense until the annual entry is posted.

Post Depreciation

Depreciation posting creates journal-entry activity. Review the date, amount, and target accounts before posting, especially for assets with unusual lives, partial-year treatment, or prior manual adjustments.

LedgerHQ's scheduled depreciation process can catch due assets, and users can also run depreciation manually when they need to catch up. Annual assets post one full-year cycle per invocation rather than twelve separate monthly entries.

Dispose Of An Asset

Dispose of an asset when it is sold, retired, abandoned, or otherwise removed from service. A disposal should stop future depreciation and record the accounting impact based on the current asset balance, accumulated depreciation, and any proceeds or loss treatment supported by the workflow.

Do not delete an asset just because it is no longer in use. Deletion is only appropriate for unused or mistaken records. Disposal is the accounting event.

Reports And Close

Fixed assets affect the Balance Sheet, Income Statement, and month-end or year-end review. Tally can inspect fixed asset context and may help identify assets that need depreciation or review, but unusual purchases, disposals, and tax-sensitive asset treatment should be reviewed by the firm.