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Fixed assets and depreciation

List what you own for years, let the yearly depreciation post itself at income-tax block rates, record a sale or scrap, and see book values on the balance sheet.

What it is

A fixed asset is something you buy to use for years — a laptop, a sewing machine, a delivery van, shop furniture. Instead of treating the whole cost as this year's expense, a share is written off every year: depreciation. Income tax sets the share per block of assets (computers 40%, plant & machinery and vehicles 15%, furniture 10%, buildings 10%, intangibles 25% by default — confirm the rates with your CA; you can edit them).

Steps

  1. Accounting → Fixed assets → Add an asset. Name, category, date, cost. Say how it was paid: from cash/bank now, owed to a supplier, already inside a recorded purchase bill (the cost moves from Purchases to Fixed assets), or already in your opening balances.
  2. Optionally give a useful life in years for the Companies Act straight-line figure — shown beside the income-tax one, not posted.
  3. Depreciation schedule (button at the top): pick the financial year, check the per-block and per-asset figures, press Post year-end depreciation after 31 March. One entry: Depreciation (expense) against Accumulated depreciation. Made a mistake? Reverse the posting and post again.
  4. Sell or scrap: open the asset, say what happened, the date and the price. The cost and the accumulated depreciation leave the books and the difference against book value is posted as profit or loss on sale.

Rules built in

  • Half rate in the first year when an asset was used for fewer than 180 days in the year it was bought (bought on or after 3 October).
  • No depreciation in the year of sale (the asset's book value at the start of that year is used).
  • Financial year April–March. Figures are per asset and summed per block; the block method pools assets, so ask your CA about a year in which a block is emptied.
  • The monthly provisional figure spreads the year's charge over the months so far, for your P&L during the year; nothing is posted until year end.

Where it shows

Fixed assets (at cost) and Accumulated depreciation on the balance sheet; Depreciation and Profit/Loss on sale in the P&L; the register and schedule as Excel from Reports.