Manage Asset Depreciation

Manage Asset Depreciation

Track fixed assets, calculate depreciation, and manage asset lifecycle.

Time: 10–15 minutes per asset Module: Account Asset Management Permissions: Accountant

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Prerequisites

• Chart of accounts configured
• Asset categories defined
• Journal entries enabled
• Access to Accounting menu

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Overview

The Asset Management system enables:

• Fixed asset registration
• Automatic depreciation calculation
• Multiple depreciation methods
• Asset category management
• Journal entry generation
• Asset lifecycle tracking
• Disposal management

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Asset Lifecycle

Asset Purchase
      ↓
Asset Registration
      ↓
Depreciation Schedule
      ↓
Monthly Depreciation
      ↓
Asset Disposal/Sale

State	Description
Draft	Asset created
Running	Depreciating
Close	Fully depreciated
Disposed	Sold or scrapped

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Steps

1. Create Asset Category

Define asset types:

1. Navigate to Accounting → Configuration → Asset Categories
2. Click New
3. Configure category:

Field	Action
Asset Type	Category name
Asset Account	Fixed asset account
Depreciation Account	Accumulated depreciation
Expense Account	Depreciation expense
Journal	Asset journal
Computation Method	Linear/Degressive
Number of Depreciations	Total periods
Period Duration	Monthly/Yearly

4. Click Save

2. Register New Asset

1. Navigate to Accounting → Assets → Assets
2. Click New
3. Enter asset details:

Field	Action
Asset Name	Descriptive name
Reference	Asset code/tag
Gross Value	Purchase price
Category	Select category
Date	Purchase/service date
Note	Additional details

4. Click Save
5. Click Confirm to start depreciation

3. Review Depreciation Schedule

After confirming asset:

1. Open asset record
2. Navigate to Depreciation Board tab
3. View schedule:

Column	Description
Depreciation Name	Period identifier
Depreciation Date	When to depreciate
Current Depreciation	Amount this period
Cumulative Depreciation	Total to date
Remaining Value	Book value

4. Process Depreciation

Monthly depreciation entry:

1. Navigate to Accounting → Assets → Assets
2. Select assets due for depreciation
3. Click Action → Create Depreciation Entry
4. Or use automated scheduler

System creates:

• Debit: Depreciation Expense
• Credit: Accumulated Depreciation

5. Post Depreciation Entry

After creating entry:

1. Open depreciation line
2. View linked journal entry
3. Click Post if draft
4. Entry recorded in books

6. Modify Depreciation

If adjustment needed:

1. Open asset

2. Click Modify Depreciation

3. Adjust:

   • Depreciation method
   • Number of periods
   • Residual value

4. System recalculates schedule

7. Dispose of Asset

When selling or scrapping:

1. Open asset record
2. Click Sell or Dispose
3. Enter disposal details:

Field	Action
Disposal Date	Date of sale/scrap
Sale Value	If sold, sale price

4. System calculates:
   • Gain/loss on disposal
   • Final journal entries

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Field Reference

Asset Category (account.asset.category)

Field	Technical Name	Type	Required	Description
Asset Type	name	Char	Yes	Category name
Asset Account	account_asset_id	Many2one	Yes	Asset GL account
Depreciation Account	account_depreciation_id	Many2one	Yes	Accum. depreciation
Expense Account	account_depreciation_expense_id	Many2one	Yes	Expense account
Journal	journal_id	Many2one	Yes	Asset journal
Computation Method	method	Selection	Yes	Linear/Degressive
Number of Depreciations	method_number	Integer	No	Total periods
Analytic Account	account_analytic_id	Many2one	No	Cost center
Active	active	Boolean	No	Active status
Company	company_id	Many2one	Yes	Company

Asset (account.asset.asset)

Field	Technical Name	Type	Required	Description
Asset Name	name	Char	Yes	Asset name
Reference	code	Char	No	Asset code
Gross Value	value	Float	Yes	Purchase value
Currency	currency_id	Many2one	Yes	Currency
Category	category_id	Many2one	Yes	Asset category
Date	date	Date	Yes	Service date
State	state	Selection	Yes	Asset status
Note	note	Text	No	Notes
Company	company_id	Many2one	Yes	Company
Entry Count	entry_count	Integer	Computed	Journal entries

Depreciation Line (account.asset.depreciation.line)

Field	Technical Name	Type	Required	Description
Depreciation Name	name	Char	Yes	Line name
Sequence	sequence	Integer	Yes	Order
Asset	asset_id	Many2one	Yes	Parent asset
Amount	amount	Float	Yes	Depreciation amount
Remaining Value	remaining_value	Float	Yes	Book value
Depreciated Value	depreciated_value	Float	Yes	Cumulative
Depreciation Date	depreciation_date	Date	No	Entry date
Journal Entry	move_id	Many2one	No	Linked entry
Posted	move_check	Boolean	No	Entry posted

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Depreciation Methods

Linear (Straight-Line)

Annual Depreciation = (Cost - Salvage) / Useful Life

Example:
- Cost: $10,000
- Salvage: $1,000
- Life: 5 years
- Annual: ($10,000 - $1,000) / 5 = $1,800/year

Degressive (Declining Balance)

Annual Depreciation = Book Value × Rate

Example:
- Cost: $10,000
- Rate: 40%
- Year 1: $10,000 × 40% = $4,000
- Year 2: $6,000 × 40% = $2,400

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Common Asset Categories

Educational Institution

Category	Life	Account
Buildings	30 years	1500 - Buildings
Furniture	10 years	1510 - Furniture
Computers	3 years	1520 - IT Equipment
Lab Equipment	7 years	1530 - Lab Equipment
Vehicles	5 years	1540 - Vehicles
Library Books	5 years	1550 - Library

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Views Available

View	Features
List	All assets with status
Form	Asset details
Kanban	Visual cards
Graph	Depreciation charts

Asset Dashboard

Shows:

• Total assets value
• Monthly depreciation
• Fully depreciated
• Assets by category

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Troubleshooting

Issue	Cause	Solution
Cannot confirm	Missing category	Select category
Wrong depreciation	Method error	Check settings
Entry not created	Date issue	Verify dates
Cannot modify	Asset running	Use Modify action
Disposal error	Pending entries	Post all entries first

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Best Practices

1. Accurate values: Enter correct purchase prices
2. Proper categories: Use appropriate categories
3. Regular processing: Run depreciation monthly
4. Physical verification: Match physical assets
5. Document disposals: Keep sale/scrap records
6. Tag assets: Use reference codes

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Security Notes

Role	Capabilities
Accountant	Full asset management
Advisor	View and report
Auditor	Audit access

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Related Tasks

• Configure Accounting
• Manage Budget
• Process Asset Requests