Dear All,
need your precious guideline,
in year 2015-16 (start date is specified 1-7-2015, Lock Date is still open) in this period i record all the assets and complete the procedure of depreciation, now auditor is saying that you have to put the closing balance of Asset (2014-16) also. what should i do…?
I am assuming you mean the closing balances for 2014-15 - not 16
You need to go each applicable asset, click on edit then tick the Starting date box and enter the values
yes yes sorry for the typing mistake,2014-15
long procedure but thank you.
To be clear, @Syed_Salman_Ali, you do not enter closing balance for a fixed asset. You enter starting balances for purchase cost and accumulated depreciation that are carried forward from a previous accounting system. Manager calculates book value on the start date.
If you are beginning a new business, you do not set a start date, and there are no starting balances. Instead, you post the purchase cost of a fixed asset to the Fixed assets account and the subaccount for the asset. Depreciation is entered year by year (or month by month or whatever). Again, Manager calculates current book value.
In either case, the information the auditor wants is available under the Reports tab in the Fixed Asset Summary, which you can generate for any desired period of time.
I have entered the opening balance (which is the carried forward figures from the previous years) for computers and its accumulated depreciation as at 01/01/2015. The opening balance consists of the costs of a few computers purchased earlier.
My problem is when I write off only ONE computer, how should I enter this transaction.
Fixed assets must either be entered individually or as a group that will be depreciated and disposed of identically and simultaneously. You cannot enter a summary of fixed assets of one type and dispose of them individually.
It would be best to enter each fixed asset (computer) as a separate fixed asset, if that data is available, so as to avoid partial disposals however if we use the following model as the current situation.
Note: I am assuming these balances as of your last financial year end’
The fixed asset consists of 3 computers @ 1000 ea - Total 3000 (or if the individual cost is unknown then the fixed assets item’s total purchase cost divided by number of computers)
The accumulated depreciation is 1800 or 600 per computer.
To dispose of one computer you would
a) via Journal Entries Credit the BS Fixed Asset + Item account 1000 and Debit the P&L Fixed Asset Loss on Sale account 1000
b) go to the Fixed Asset tab, click on the Accumulated Depreciation balance for the item and then click “New Depreciation Entry” and enter the date of disposal and an amount of -600 (note the minus sign) and click Create
The result of these two actions would have the P&L showing a nett expense of 400 (1000 - 600).