This article explains how to create fixed asset, accumulated depreciation, and depreciation expense ledgers, as well as how to record fixed asset transactions and generate reports to reflect depreciation correctly in the system.
Step 1: Create Ledger
Create a Fixed Asset ledger for an asset from General, General Ledger Account Maintenance.
Create an Accumulated Depreciation ledger for the new fixed asset ledger from General, General Ledger Account Maintenance.
Assign the Special Account = AD to the Accumulated Depreciation ledger.
Please make sure to select the fixed asset code to offset the amount from the asset from the accumulated depreciation.
Create Depreciation Expense Ledger General, General Ledger Account Maintenance.
Step 2: Create a transaction and generate a report
Select Transaction, Transaction File Maintenance, and select Add to add a new transaction.
Record the purchase entry from a hire purchase loan of an asset or a lump sum payment as a Debit Fixed Asset ledger and Credit cash, Bank, or Hire purchase Ledger.
Maintain transaction Debit expenses and Credit Accumulated Depreciation.
Open Reports, Profit and Loss, Balance Sheet and Fixed Assets. You should be able to see the transactions related to depreciation in the reports.