Create a fixed asset record

NOTE: Creating a fixed asset doesn't post any transactions to the audit trail.

1. Click Fixed assets, then click  New.
2. Complete the Asset Record window as follows:
   
   Details

   Asset Reference*	Enter the asset reference. You can enter up to 8 characters.
   Description	Enter a description of the asset. You can enter up to 3 lines each containing up to 60 characters.
   Serial Number	If required, enter the serial number. Enter up to 60 characters.
   Location / Employee	Enter the location or employee where the asset is allocated. For example, if the asset is a company car you can enter the employee name who uses the vehicle. You can enter up to 15 characters.
   Date Purchased*	Enter the date on which the asset was purchased. The date is for reference purposes only. It isn't used in the depreciation calculation to back date depreciation and doesn't act as a start date for the depreciation.
   Supplier A/C	If required, enter the supplier's account reference. This is for reference purposes only. No transactions are posted to the supplier's activity.
   Assets	From the drop-down list choose the relevant asset category. Assets Categories and the text label for the box can be amended within the Configuration Editor.

   * This information is mandatory.

   Posting

   Department*	If required, select the department.
   Balance Sheet Depreciation N/C*	Choose the nominal code to be used for the balance sheet depreciation posting - Journal Credit. This is posted as part of the month end routine. Default Balance Sheet nominal codes: 0021 - Plant/Machinery Depreciation 0031 - Office Equipment Depreciation 0041 - Furniture/Fixture Depreciation 0051 - Motor Vehicle Depreciation If you're unsure which Nominal Code to use, you must refer to your Accountant for advice.
   P & L Depreciation N/C*	Choose the nominal code to be used for the P&L depreciation posting - Journal Debit. This is posted as part of the month end routine. Default P&L nominal codes: 8000 - Depreciation 8001 - Plant/Machinery Depreciation 8002 - Furniture/Fitting Depreciation 8003 - Vehicle Depreciation 8004 - Office Equipment Depreciation If You're unsure which Nominal Code to use, you must refer to your Accountant for advice.
   Depreciation Method	The fixed assets register supports the following depreciation methods: Straight (Straight Line) Reducing (Reducing Balance) Write Off Once an asset has been depreciated the method can only be changed to Write Off. For more information about the way depreciation is calculated for these methods refer to article . Other depreciation methods do exist, for example sum of digits, but only those listed above are supported in the fixed assets register.
   Depreciation Rate*	Enter the annual depreciation rate as a percentage. If You're unsure which method to use, you must refer to your accountant for advice.
   Cost Price	Enter the original Cost Price of the Asset. Once an asset has been depreciated this box is inactive. If you were charged VAT and you have or can reclaim it then the Net Value should be entered.
   Book Value	New fixed asset - Enter the Cost Price. Existing fixed asset - Enter the current book value (the depreciated value). Once an asset has been depreciated this box is shaded.
   Next Depreciation	Shows the depreciation value that posts when the month end is run.
   Depreciation To Date	Cost Price minus Book Value.
   Date Last Posted	Blank - The asset hasn't yet been depreciated. Shows the program date when the asset was last depreciated as part of the month end. The asset can't be depreciated again in this month or prior to it.

    

3. Click Save, then click Close.

 TIP: For further information about depreciation, you can use our guide on How to post asset depreciation. 

You've now successfully created a new record. The fixed asset starts to depreciate when you next run the Month End option and select the Post Depreciation check box.

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Purchase of a fixed asset on hire purchase

If your company purchases a fixed asset and finances this with either a loan or hire purchase you must record this in your accounts.

Create the new nominal codes

If you already have these nominal codes then please proceed to the following section To record the hire purchase figures.

If you're using the default nominal ledger structure we suggest you use the following nominal codes >

 

Asset Valuation

The Asset Valuation window displays the same information as the fixed assets list but also includes total cost, total depreciation to date and total value.

To access the Asset Valuation window click Fixed assets, then click Valuation.

The Asset Valuation window includes the following information:

Asset reference	Record > Details.
Description	Record > Details.
Cost price	Record > Posting.
Depreciation to date	Record > Posting.
Book Value	Record > Posting.

Write off a fixed asset

From time to time you may need to write off a fixed asset from your accounts. This may be when the asset becomes obsolete, or when the depreciation postings are so negligible that it's easier to write off the value of the asset from your accounts. You should follow the steps in this article when You're writing off the asset, but it's still owned by the company.

NOTE: If you're using Sage Accounts and don't use the fixed assets register, you must manually write off the value of your fixed assets from your accounts. For further information about this, please refer to the section To record the sale by posting manual journal entries.

This section uses the example of a fixed asset with the following values:

• Cost Price - £/€10,000
• Depreciation To Date - £/€8,000
• Book Value - £/€2,000

How to set a fixed asset record to write off

1. Fixed assets > select the fixed asset to be written off > Edit > Posting.
2. Depreciation Method > choose Write Off > Save.

You've now set the fixed asset record to automatically write off the asset the next time you run a month end for depreciation.

Asset disposal wizard

NOTE: If you're using a flat rate VAT scheme, for help disposing of an asset, please refer to the section Exceptions for capital assets on the following articles:

• How to account for VAT using the Flat Rate VAT Scheme - Invoice Based - UK only
• How to account for VAT using the Flat Rate VAT Scheme - Cash Based - UK only

The asset disposal wizard guides you through entering the figures to show the disposal of a fixed asset in the nominal ledger, and deletes the asset from the fixed assets register.

Dispose of a fixed asset

1. Fixed assets > Disposal.
2. Complete the boxes as follows:
   
   

   Fixed asset to be disposed*	Choose the asset you want to dispose of.
   Posting date*	Enter the date of the disposal.
   Department*	If required, enter a department.
   Original purchase nominal code*	Select the nominal code that the asset was originally entered against in the nominal ledger.
   Original purchase tax code*	The tax code defaults to T1. If required, you can change this. We can't advise you what tax code to use.
   Sales of assets nominal code*	Enter the Sale of Assets nominal code.
   Bank account*	If You're selling the asset, select the bank account that the money is to be paid in to.
   Gross sale value	Enter the gross value, including VAT, for the disposal of the asset. This is the total amount that you received for the fixed asset.
   VAT on sale	This value calculates automatically.
   Net sale value	This value calculates automatically.

3. Next > Post.
   
   The journal posts and the fixed assets record deletes.

Record sale by posting manual journals

NOTE: If you're using a flat rate VAT scheme, for help disposing of an asset, please refer to the section Exceptions for capital assets on the following articles:

• How to account for VAT using the Flat Rate VAT Scheme - Invoice Based - UK only
• How to account for VAT using the Flat Rate VAT Scheme - Cash Based - UK only

These steps are based on the following example:

• A vehicle which was originally purchased for £/€10,000.
• Depreciation to date is £/€7,500.
• The asset is sold for £/€500.

1. Nominal codes > Journal entry.
2. Enter a reference, date and the journal details to record the disposal of the fixed asset.
   
   For example, to transfer the original purchase price from the asset nominal code, post the following:
   
   

   N/C	Name	Details	T/C	Debit	Credit
   0050	Motor Vehicle	Disposal	T9		10,000.00
   4200	Sales of Assets	Disposal	T9	10,000.00

   
   To transfer the accumulated depreciation to date, post the following:
   
   

   N/C	Name	Details	T/C	Debit	Credit
   0051	Motor Vehicle Depreciation	Disposal	T9	7,500.00
   4200	Sales of Assets	Disposal	T9		7,500.00

   
   To record the proceeds from the sale, post the following:
   
   

   N/C	Name	Details	T/C	Debit	Credit
   1200	Bank Current Account	Disposal	T9	500.00
   4200	Sales of Assets	Disposal	T9		500.00

   
   If you're disposing of an asset and still have an HP loan outstanding, instead of posting the proceeds of the sale to your bank you should post it to the HP loan nominal code, for example 2310. If you're unsure, please contact your accountant for guidance.
   
   
3. Save > Close.

You've now posted the journal entries to record the disposal of the asset. As a result of these journals the balance on the Sales of Assets nominal code is a £/€2,000 debit. This appears as a loss on the profit and loss report.

Depreciation was missed from a month end

Step 1 - Check the Date Last Posted

1. Fixed assets > select an existing record > Edit.
2. Posting > Date Last Posted.

Step 2 - Solution

Date Last Posted is prior to the missing period

1. Set the program date back to the first missing period.
2. Run month end for the missing periods.
   
   If new assets have been created and you don't want to include depreciation for these in the back dated periods, you must remove the Cost Price and Book Value before processing the month end for the missing periods. These must be re-entered before processing the month end for the first period in which they're to be depreciated.

Date Last Posted is after the missing period

Option 1 - Restore a backup

For example, if you intended to run August month end and ran September in error, in this instance it may be feasible to restore a backup and then process the month end for the correct period.

Option 2 - Not feasible to restore a backup

1. Post a journal to reverse the depreciation for the periods posted beyond the missing period.
2. Delete the asset records.
   
   

   NOTE: This must be done as the existing asset records will always be incorrect and can't be manually adjusted.

3. Recreate the asset records, ensuring you enter the correct book value.
   
   

   TIP: You can use the Duplicate option to generate a new record before deleting the original record. However you must enter a new record reference number, cost price and book value.

4. Run month end.

Example

1. Post journals to reverse the depreciation already posted for a fixed asset in September.
2. Delete the asset record.
3. Recreate the asset record using the book value of August.
   
   

   TIP: If you don't know the book value for August, use the book value of the asset before it was deleted and add the value of any reversed depreciation journals to it.

4. For the depreciation value only, post the missed month end for August.
5. Post any subsequent months as normal.

Fixed asset was set up incorrectly

Option 1 - Restore a backup

This is the best option but depends on when the month end was run and how much information you have to re-enter.

Option 2 - Not feasible to restore a backup

1. Post journals to reverse the depreciation already posted for the fixed asset.
2. Delete the asset record.
   
   You can use the Duplicate option to generate a new record before deleting the original record. The details of the duplicate record can then be corrected.
   
   
3. Recreate the asset record, ensuring that you enter the correct book value.
4. Back date any month end postings.
   
   To do this set the program date to the required month then run the month end. Depreciation is posted only for those fixed asset records not already depreciated on or after the specified month.

 

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