This guide explains how to add fixed assets that were acquired before starting to use SimplBooks.
If you are acquiring new fixed assets while already using the software, please read the guide Adding New Fixed Assets. This guide also explains how to record depreciation for fixed assets that were already owned by the company before starting to use SimplBooks.
The method for adding fixed assets depends on the depreciation method. Currently, the software can only generate straight-line depreciation automatically. Declining balance depreciation must be entered manually as accounting entries.
1. ADDING FIXED ASSETS WITH STRAIGHT-LINE DEPRECIATION
Enter a name for the fixed asset.
Straight-line depreciation is entered in the software as a percentage, even though the depreciation is calculated based on the depreciation period (in years). Adjust the depreciation percentage as needed:
- E.g. 10 years = 10%, 5 years = 20%, 4 years = 25%, etc.
Enter the original acquisition cost and date, as well as the depreciation rate as a percentage. Also fill in the “First depreciation entry” field.
- If the date of the first depreciation entry is earlier than the opening balance date in SimplBooks, any depreciation prior to that date will not be posted as accounting entries, but will be taken into account when calculating the residual value of the fixed asset.
You can also change the accounting accounts used for depreciation.
If in the future you want to keep the previous depreciation entries unchanged and modify the depreciation period, open the fixed asset and make the change under “Changes to fixed asset accounting”. Select “Add new fixed asset calculation change”.
Enter the effective date of the change, set the remaining value in the “New purchase price” field, and add the new depreciation rate as a percentage per year.
- Example: Original acquisition cost €4,000 with an original depreciation period of four years. One year of depreciation has been recorded, and you now want to change the depreciation period to five years. Enter the value as €3,000 and set the annual depreciation rate to 20% (= 5 years).
When you save the calculation change, the software will ask from which date the new depreciation entries should be generated.
2. ADDING FIXED ASSETS WITH DECLINING BALANCE DEPRECIATION
NOTE: Currently, the software can only generate straight-line depreciation automatically. Declining balance depreciation must be entered manually as accounting entries under ACCOUNTING > Entries.
You can add the residual values of assets subject to declining balance depreciation in the software via the opening balance entry.
Set the depreciation date on the new entry. Depreciation can be posted monthly or annually, for example.
- Balance sheet depreciation account. If you want to track depreciation in a separate account, you can use e.g. account “1165 Accumulated depreciation on machinery and equipment”. You can also post depreciation to the same account as the asset.
- Income statement depreciation account. E.g. “6900 Planned depreciation”. You can also add your own depreciation accounts for different fixed assets if you want separate lines on the income statement for e.g. buildings and machinery depreciation. Instructions for adding accounts can be found here.
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