1.5 KiB
Depreciation for Fixed Asset Items
Depereciation of fixed asset items.
####Separate Group of Depreciation Account
####Depreciation Entry for Fixed Asset Items
Depreciation is when you write off certain value of your assets as an expense. For example if you have a computer that you will use for say 5 years, you can distribute its expense over the period and pass a Journal Voucher at the end of each year reducing its value by a certain percentage.
As per perpetual inventory valuation system (set by default), you should create Stock Reconciliation for depreciating value of fixed asset items. In the Stock Reconciliation template, you should only enter Item's Code, Warehouse and its current value.
Let's assume current value of our computer is $250, and its purchase value was $320.
In this case, depreciation amount of Computer will be $70 ($320-$250). Depreciation Amount will be booked under Difference (expense) Account selected in the stock reconciliation.
Following is how general ledger will be posted for fixed this Stock Reconciliation.
Click here for steps to be followed when making Stock Reconciliation entry.