Fixed assets

A fixed asset is something the business owns and uses for more than a year: a lorry, laptops, shop fittings, a generator, a building. Its cost is spread over its useful life as depreciation, a monthly expense.

Adding an asset

Open Accounting > Fixed assets and choose Add asset. Pick the category: MannaBooks fills in the usual method, life and account (for example computers over 3 years; vehicles at 25% a year on the reducing balance). Change them if your accountant uses different ones.

How did you get it?

• Bought with a bill or expense in MannaBooks. Enter the bill or expense with the line posted to the fixed asset account (such as Motor vehicles), then add the asset here. Adding it does not post anything again.
• Owned before you started using MannaBooks. Its cost, and the depreciation already charged up to a date, are brought into the books against Opening balance equity.

In use from is when depreciation starts (the whole month counts). Worth at the end (the residual value) is what you expect to sell it for when it is done; it is often 0.

Methods

• Straight line: (cost less residual value) divided by the months of its life, the same every month.
• Reducing balance: a yearly percentage of the book value that is left, so the charge falls each year. Common for vehicles and machinery.
• Not depreciated: for land.

These are book depreciation. KRA's capital allowances (wear and tear) for your tax return are worked out separately by your tax adviser.

Running depreciation

At the end of each month open Fixed assets > Depreciation, choose the month and Run depreciation. The preview shows each asset's charge. One journal is posted: Depreciation expense (by cost centre, if the asset has one) against Accumulated depreciation. Months that were missed are caught up in the same run.

Made a mistake? Undo the latest run, fix the asset, and run it again.

Selling or scrapping

Run depreciation up to the month before, then open the asset and choose Sell or scrap. Enter the date, the money received (0 if scrapped) and the account it went into. MannaBooks removes the asset's cost and depreciation from the books and posts the gain or loss (money received less book value).

The Register button downloads the full asset register for your auditor.