Fixed assets

A fixed asset is something the business owns and uses for years - a truck, a zero-turn, a trailer, a skid steer. Its cost does not hit the profit and loss the month you buy it. It sits on the balance sheet and comes off a little each month as depreciation, so each year carries its share of the wear. The register keeps that schedule and posts it for you.

Setting up the accounts

The register posts to four accounts: the asset account the cost sits in, its accumulated depreciation (a contra account that nets against it on the balance sheet), depreciation expense, and a gain or loss on disposal account. The first time you open the register, a card offers to set them up - one click creates whichever ones your chart is missing (1500 Equipment & Vehicles, 1590 Accumulated Depreciation, 6700 Depreciation Expense, 4950 Gain or Loss on Asset Disposal) and points the register at them. If your chart already has accounts that fit, pick them under Books → Accounting → Chart of accounts, in the posting defaults.

Every asset carries its own three accounts, prefilled from those defaults, so a second asset account for vehicles is one pick away.

Registering an asset

New asset asks for:

• Name and, if you track your fleet in LawnLedger, the equipment record it belongs to. Opening the register from an equipment record prefills the name, cost and purchase date.
• Cost, salvage value (what it will be worth when you are done with it - zero is fine) and the in-service date. Depreciation starts in the month the asset goes into service, whatever day of the month that is.
• Method: straight-line (the same charge every month) or declining balance at 150% or 200% (larger charges early, switching to straight-line once that gives more). Life in months; 36, 60, 84 and 120 are the common ones.
• Owned before the books: for an asset you already had when you started here, the depreciation already taken and the first month these books should post.
• Whether to post the purchase now. On, the register debits the asset account and credits where the money came from - a bank or card account, a loan, or equity for an owner’s contribution. Off (“already on the books”) records the asset without posting anything, for a cost that already reached the asset account from an expense, a bill or an opening balance.

The rail on the right shows the first year of the schedule as you type, from the same arithmetic the books post with.

From an expense

When a purchase was recorded as an expense posted to a fixed-asset account, the expense already carried the cost onto the books. Open that expense and click Track as a fixed asset under its account: the register opens prefilled with the cost, the purchase day and the account, with the purchase switch off and locked, so nothing posts twice. Once the asset is saved the expense says which asset it became, and a second asset from the same expense is refused.

How depreciation is figured

Every method uses the full-month convention: the in-service month counts in full, and the month of a disposal does not count at all.

• Straight-line spreads cost less salvage (less any depreciation already taken) evenly over the life. The cents that do not divide land on the last month, so the schedule ends exactly at salvage.
• Declining balance charges a fixed share of what is left each month - 150% or 200% of the straight-line rate - and switches to straight-line on the remaining balance in the month that gives more, so the asset still reaches salvage by the end of its life and never goes below it.

A charge posts at month end, once the month has ended: a system entry debiting depreciation expense and crediting accumulated depreciation, dated the last day of the month. The scheduler posts them; you never type one. Each posted month links to its entry from the asset’s page.

When a month is locked

If the month a charge belongs to is already behind the period lock, the register does not skip it and does not post into the locked month. It posts the charge on the first open day after the lock, with a memo naming the month it covers, and marks the month Caught up on the schedule. If that day is still ahead, the asset waits for it.

Changing an asset

Life, salvage and method can change any time; the change applies from the next month that has not posted. Months already posted stay as they were, and the remainder is re-spread.

Once anything has depreciated, the cost, in-service date, the opening figures and the purchase are frozen - they decided the months already on the books. Before that, all of them can change, and a purchase that was posted is reversed on its own day and posted again.

An asset nothing has depreciated can be deleted. After that, dispose of it instead.

Disposing of an asset

Dispose on the asset’s page asks for the day, what you received and where it landed, and which account takes the gain or loss. The register first posts any months still owed through the month before the disposal, then posts one entry that clears the cost and its accumulated depreciation against the proceeds; the difference lands in the gain or loss account. The dialog shows the book value and the gain or loss live before you confirm.

A disposed asset stays in the register with its disposal, and its equipment record says so.

The report and the balance sheet

Reports → Fixed Asset Register lists every asset on the books as of a day: cost, accumulated depreciation, book value and the month’s charge, with the calendar year’s disposals and their gain or loss, and one asset’s months on request. It downloads as PDF, Excel or CSV. Accumulated depreciation counts the entries dated on or before the day, so the register foots to the balance sheet as of that day.

On the balance sheet, the asset accounts show under Fixed assets, netted by accumulated depreciation; depreciation expense shows on the profit and loss. On the statement of cash flows, depreciation is a non-cash charge: it is added back to net income under operating activities, and the investing section carries the purchases and disposals alone. The register’s entries appear in the Journal like any other system entry and link back to the asset.

The register is also a section a report pack can carry (the year-end lite template includes it at year end), a file in the year-end package (fixed-assets-<year>.csv and .pdf, when the organization tracks any asset), and a report you can schedule like any statement - as of the send day, as PDF, Excel or CSV.

The close

The monthly close checklist has a Depreciation posted row: it turns red while an active asset still owes a month on or before the period being closed, and opens the register so you can see which one. It is a gating row - the month will not lock until every asset is current.