When to enter the depreciation entries?

I apologize if this topic has been discussed and documented extensively already, but I’d like to understand one thing that I believe is not clear enough, at least to me.

My deprecation method is straight-line, so I just divide the cost of the asset by the number of years as specified by the local authorities.

When it comes to add the fixed asset deprecation entries, am I supposed to enter all of the entries for each accounting period upfront or I need to remember to do it each year?

Probably a silly question, but I’m no accountant and I’m just trying to do things correctly.

In my experience, you can do either (unless specified otherwise by some sort of regulatory requirement).

As a small consulting business with limited fixed assets, I enter my depreciation on the last day of the financial year (one journal; limited effort). However, I used to be part of a very large, public listed business in which depreciation was done every month (many assets, large value, and a moderately significant part of the P&L costs).

From a management accounting point of view, if you want to monitor your financial position, say, monthly and assess financial performance regularly, including profit margins, then do your depreciation each accounting period. This will also be relevant if you have partners or shareholders to whom you need to report regularly. If only you need to keep track, depreciation is a small proportion of costs, and depreciation is only critical for tax accounting, then an end of year entry may be all you need (and, in the interim, you keep in mind the effect of depreciation on the bottom line in your head).

Cheers… Richard


While @Gillrich provided some valuable perspective, I think your real question is whether you should enter all the depreciation entries for the life of the asset at the beginning or enter them financial period by financial period. Normally, you would do the latter.

However, if you want to construct a complete depreciation schedule for the life of the asset and enter future depreciation, Manager will handle that just fine, as long as the entries are dated in the future. Manager ignores future-dated transactions until the dates arrive. But you are more likely to confuse yourself, or forget that you did the future entries and end up with double entries.

This is probably the answer that I was hoping for. It allows me to set it and forget it. Obviously i would still need to keep in mind the depreciation entries, in case an unforeseen event requires to write off the asset before the end of its useful life. But like this it will be more manageable to me.

Thank you both for your insights.

This is most easily done in Manager by creating a depreciation table for the first period manually calculating the amount for each item. Name the depreciation table entry something like “Straight line depreciation for x months”

For subsequent periods clone the original and change the date.

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This begs the question, why not have recurring depreciation entries?

Because Manager currently does not include straight-line depreciation in its automatic worksheet. And unless you are using straight-line depreciation, the entries will not recur.

That’s exactly why I need recurring depreciation since each and every one of my businesses uses straight line depreciation.

If Manager doesn’t want to specifically cater for straight line depreciation, I don’t know why not allow users to use Journals. This would solve many problems for us.



  • it is a special case not generic solution.

  • Clone and updating the data once each period achieving depreciation for all straight line depreciation items is already very efficient

  • if Manager added automated continuous depreciation, then there are better approaches.

If you want to just do it yourself using journals then don’t enable the depreciation tab and just use journals.

For users who find journals too complicated a simplified depreciation tab is provided.

Program support for a hybrid mixture a few user may envisage would add programming complexity to support.

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Hello Patch. how’s it going, mate?

I can’t agree with your breakdown of the situation here, namely:

For a few assets, maybe. But I would still argue that recurring reminders are more efficient and less prone to error. The cloning procedure falls apart as you add more and more assets, it’s not really all that efficient.

I don’t see better approaches right now, but I am open to any improvement over this right here.

But this means that I completely forgo keeping track of accumulated depreciation asset wise and that can’t be good.

So what? A lot of people find liquid to be complex so does that mean that themes should be scrapped? This logic is flawed.

That’s a very dense and rich statement, so please bear with me for a while.

Going back to my discussion with the developer when this change was originally introduced, there seems to be no technical issue with enabling both journals and depreciation entries, this decision seems to be purely influenced by preference.

Depreciation entries are nothing more than a fancy form that writes two lines to the GL. So it only seems logical to give the user the choice to do that manually. There’s benefits to this approach as well.

Also, I am not pushing for a “hybrid mix”, instead I want a more robust and versatile method that works no matter what. There is a big difference right there.

Also also, I wouldn’t place a bet on the “few users” part.

A single depreciation table entry for a period will cover all, potentially hundreds of items requiring straight line depreciation. It becomes more efficient the more items requiring straight line depreciation.

If continuous depreciation is to be added to Manager it should cover most of users continuous depreciation requirements.

Automating fixed depreciation table entries only addresses straight line depreciation. While that may cover some users requirements it’s far from all users requirements.

Where it gets harder is there’s a large variety of methods used which differ in detail. Hence the current solution which allows users to mix automatic residual value, manual adjustments, and cloning to cover all requirements.

Examples of details which make implementation of automated continuous depreciation more complex

  • Purchase & disposal possibly during a period

  • Distribution of residual value, are you going to implement the underlying exponential decrease, or a straight line approximation, is the straight line approximation divided in to 12 equal parts or months or fortnights or weeks or days? How are you going to handle the rounding errors?

My point is for something which can be done once a year and there is a lot of variation in the detail across all users, the return on programming investment is not as good as other Manager ideas.

I didn’t request for that.

or that.

But I will be happy with either one of these:

  • Recurring depreciation (a feature that’s already there); OR

  • Journals (a feature that was recently there)

The current method is laborious at best and prone to manual errors and any one of these two solutions will make a world of difference.

@Patch and @Ealfardan, both of you are overlooking the fact that adding additional depreciation methods to the automatic worksheet would be less work all around: choose your method, define the period, and get depreciation entries for all assets at one go. Recurring entries, journal entries, and pre-entered transactions are all more complex.

This was promised when the declining balance worksheet was first introduced, but we have not seen it yet, despite how frequently straight-line depreciation is used.

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