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Creating Fixed Asset Codes

You use a fixed asset code in e-automate to define depreciation settings for a fixed asset. The depreciation code defines the following:

Method : Method of depreciation. You can select from Straight Line, 150% Declining or 200% Declining.

Convention : Tells e-automate how much of the cost or basis you can depreciate the first year based on when during the year you put the fixed asset in your business. In e-automate there are the following conventions:

Actual Days: Calculates depreciation based on the actual day the asset was placed in service.

Full Month: Assumes the asset was placed in service at the start of the month in which the asset was actually placed in service.

Half-Year : Assumes the asset was placed in service at the mid-point of the fiscal year.

Mid-Month : Assumes the asset was placed in service at the mid-point of the month the asset was placed in service.

Mid-Quarter : Assumes that the asset was placed in service in the middle of the quarter in which the asset was actually placed in service.

Depreciation cycle: The cycle in which you depreciate the asset.

Recovery period: Amount of time over which you depreciate the fixed asset.

Asset account: The protected reconcilable account for the fixed asset.

Accumulated depreciation account: The protected reconcilable account to track accumulated depreciation.

Depreciation code: The code that defines the depreciation expense/ department distribution.

When you associate a fixed asset code to a fixed asset, e-automate pre-populates the fixed asset with the fixed asset code’s settings. You can change most of these settings on the specific fixed asset as necessary.

There are three methods of depreciation: straight line, 200% Declining balance, and 150% Declining balance.

Straight Line: The straight line method calculates an exact amount per period for the recovery period of the asset. If your asset was valued at $10,000 and you were depreciating monthly over four years, e-automate would depreciate $208.33 per month until the asset was fully depreciated.

200% Declining: When e-automate uses 200% Declining balance, it depreciates at twice the rate calculated when using straight line. For example if we were using the 200% Declining method, e-automate would depreciate at $416.67 per month the first year and then re-evaluate at the beginning of the next year. When evaluating, e-automate determines what the yearly straight line depreciation amount would be for the remaining recovery period and the remaining balance. If the calculated straight line depreciable amount is higher than the 200% Declining depreciable amount, e-automate switches and begins depreciating using the straight line rate for the duration of the recovery period. If the 200% Declining amount is higher, e-automate continues using it for another year until it re-evaluates again.

150% Declining: The 150% Declining method works the same as the 200% declining method except the amount calculated is 150% of the straight line rather than 200%. e-automate performs the same calculations each year and switches to straight line when straight line is greater.

If you choose to use one of the accelerated depreciation methods, you should be aware of the following requirements:

The Depreciation cycle field on the fixed asset must be Monthly or Annual. If you select Monthly, annual depreciation is calculated and divided equally among the months available to depreciate that fiscal year.

The value of the Recovery period (months) field must be a multiple of 12.

The Depreciation period is field must be the first day of a month.

Getting to the TransactionGetting to the Transaction

From the Tools menu, select Lists and Codes to open the Lists and Codes window.

In the Select a list or code type field, use the drop-down menu to select Fixed Asset Codes.

Click [New] to open the New Asset Code window.

Basic InfoBasic Info

Complete the following fields as appropriate:

Asset code: Name of the fixed asset code.

Description: Brief description of the fixed asset code.

In the Method field, use the Lookup to select your depreciation method.

In the Convention field, use the Lookup to select the convention used. Currently, Actual Days is the only available option.

In the Depreciation cycle field, use the Lookup to select the cycle in which you intend to depreciate assets associated with this fixed asset code.

In the Recovery period (months) field, enter the number of months over which you depreciate fixed assets associated with this code.

In the Asset account field, use the Lookup to select a fixed asset account in which you will track the value of this asset.
Note: If you intend to reconcile your fixed asset values with the general ledger, you should select a protected fixed asset account.

In the Accumulated depreciation account field, use the Lookup to select the accumulated depreciation account you will use to track depreciation associated with this asset.
Note: If you intend to reconcile your fixed asset values with the general ledger, you should select a protected accumulated depreciation account.

In the Depreciation code field, use the Lookup to select the depreciation code (expense account and department combinations) associated with this fixed asset.

Completing the TransactionCompleting the Transaction

Click [OK] to save the new asset code.