I have little knowledge of accounting but trying to learn. I have a small woodshop and it is time to start tracking everything that is going on, or will be going on. I have a good amount of equipment that I use and am wondering if I need to add those items into fixed assets, even though the items were not paid for by the company. Also, how would I add a value to these, or would it really be needed?
This is not a question for the Manager forum, but for your accountant. Whether or not a piece of equipment or tool qualifies as a fixed asset depends on your local accounting standards and tax regulations, how long you expect it to last, and how much it cost. Additionally, you may be able to make certain elections about how to treat assets, but will need to be consistent across your business.
If you purchased these items yourself, prior to starting with Manager, or even prior to starting your business, they may qualify as in-kind contributions, which would need to be valued at their current book value, which is probably their current market value. But many factors are involved. Again, an accountant will help you sort this out.
As for how things are treated in Manager, be sure to read all the Guides about fixed assets. The way to get their value into Manager could be by expense claim or journal entry, depending on what your accountant says. Or you may only need to enter starting balances, again depending on the exact situation. This is not a simple topic, but Manager can easily handle whatever your accountant tells you is necessary.
Thanks. I will more than likely need to get someone else involved, but want to get in place what I can for my own knowledge.
I think that @Tut gave you a lot of good pointers. For example you need to realise that if assets belong to your business irrespective of how you got it, they are meant to help together with any inventory item if you would have it, to sell some service, good or asset. Many jurisdictions apply so called fairness principles.This means in this case that you need to assess the values of each iasset and make sure it is entered.
@hallwooddesigns, you can ask your accountant if the company can buy the equipment from you at the “arms length” market value and depreciate it based on the purchase price from you. You will also need to check with your accountant if the sale will have personal tax implications for you.