Usually, you will create a transaction with a fixed asset account code which will then generate a pending asset on the fixed asset register. However, there may be times that you will need to create a fixed asset independently for example, if you purchased an asset before using Clear Books; where a fixed asset account code has not been used; when a pending asset has been deleted etc.
Once a fixed asset has been created, you can generate depreciation transactions manually or automatically in line with the depreciation details you have set for the fixed asset.
Fill out the details of the form appropriately. As the asset is not being generated from a transaction you will need to fill in the ‘Asset name’, ‘Cost’ and you will also need to select a fixed asset account code in the ‘Account’ field. You can also enter a ‘Purchase date’ if you bought the fixed asset before the date at which you would like the asset to start depreciating from.
In the ‘Depreciation method’ field you are given a choice of three options.
The ‘Do not depreciate’ option will mean that no depreciation will occur.
For the ‘Reducing balance’ method of depreciation enter both the ‘Depreciation rate’ and ‘Economic Life’. Enter 0 in the ‘Economic Life’ field to indicate infinite economic life.
For the ‘Straight line’ method of depreciation enter the Depreciation rate and the system will automatically calculate and update the ‘Economic Life’.
You can select from the default accounts for both the ‘Depreciation account’ and ‘Accumulated depreciation account’. You can create your own accounts as described in ‘Fixed Asset account codes’
You may need to enter an accumulated depreciation amount if the purchase was prior to starting Clear Books. This will affect the ‘Economic life’ calculation and once confirmed it will also adjust the ‘Net Book Value’ e.g. if the asset cost is £1000 and the accumulated depreciation is £100 the Net Book value will be £900.
In the ‘Depreciation start date’ choose a date from which the asset will generate months to be depreciated from. This field will not appear if you have selected ‘Do not depreciate’ in the ‘Depreciation method’ field.
If you have auto depreciation enabled or use the ‘Process assets’ depreciation feature, depreciation transactions will be created from the ‘Depreciation start date’
Click on the ‘Confirm new asset’ button to complete.