Currently fixed assets can either be active or disposed. Often, assets are purchased, or begin being built/made but are not yet in service (depreciation not begun); it would be very convenient if there were a checkbox or dropdown where status could be set to ‘Not in Service’ or ‘Not Yet in Service’ so that only depreciating assets were marked active.
Why dont you use Drop-down List type Text custom field?
Once you purchase a fixed asset, it should be depreciated or that’s my interpretation of financial rules
You could also build or develop an asset. In this case, you only start your depreciation when it’s ready for use.
For US taxes, at least, you only start depreciation on an asset when it has been placed in service, so if an asset is not in service yet, it sits on the balance sheet at it’s undepreciated cost basis
That is true, but it does not mean the asset should be accounted for in some special way just because depreciation has not yet begun. Manager uses the term active only for display purposes, to conveniently indicate whether or not an asset has been disposed. In Manager’s parlance, active means only that disposal has not occurred. It has nothing to do with any of the many depreciation schemes in use around the world.
From an accounting perspective, what matters are the relationships between acquisition cost, accumulated depreciation (if yet any), and resulting book value. If you personally find it convenient to flag assets not yet being depreciated, beyond their rather obvious zero values for accumulated depreciation, @shahabb’s suggestion to use a text custom field is most appropriate.
For that matter, indicating that a fixed asset has been disposed really has no accounting purpose either. It merely removes assets no longer being depreciated or carried at any book value from lists, simplifying reports. There would be nothing wrong with carrying them forever at zero book value.
If you have assets that are being installed or are being constructed, you need to create an asset account called Works in Progress and accumulate costs in this account until the asset is placed in service. When the asset is placed in service then journal the total costs from Works in Progress to the relative fixed asset account.