Depreciation is when you write off certain value of your assets as an expense. For example, office computer will be used for five years. Hence total value of computer should be booked as expense over the period of five years.
As per perpetual inventory valuation system (set by default), you should create Stock Reconciliation for depreciating value of fixed asset items. Check below steps to learn more.
Select Fixed Asset Items in the item table. Update Warehouse of an item. For item valuation, update post-depreciation value. For example, item value was 100. Depreciation amount is 20. As per this post-depreciation valuation of an item will be 80. Hence 80 should be posted as valuation in the Stock Reconciliation.
Click [here]({{docs_base_url}}/user/manual/en/setting-up/stock-reconciliation-for-non-serialized-item.html) for steps to be followed when making Stock Reconciliation entry.
