Depreciating Assets

Carving · ‎April 13, 2021

I am struggling with depreciating assets in Quickbooks Premier Desktop 2020. The instructions that I have been able to find on Quickbooks Support are the Online version, not the Destop version. One comment even stated that the “Track depreciation of this asset” function is not available in the Canadian version.

I have created a new Account number 17101 under “Accum Depr – Furn & Equip” (I assume this the correct location) but based on the Online instructions there is no dropdown in the Desktop version for "Account Type" to select “Other Expense” nor “Detail Type” to select “Depreciation”.

On the Desktop version when you create the account there is a question “Should I enter an opening balance”. Opening this up it states “if you purchased the asset before your Quickbooks start date, do not create a transaction to put money in the account". So I did not enter any amount.

Moving to “Make General Journal Entries”. On this screen do I use the new account number created? However, if I want to depreciate the asset over a number of years, then what amount should I show in the “Debit” column (I assume this is the right column to enter the amount). Is there anything else I need to enter? What do I do in subsequent years? Do I have to follow these steps in subsequent years until the asset is fully depreciated?

As you can gather, I am not an accountant and I am doing this for a non-profit group. Any assistance would be greatly appreciated. Regards.

john-pero · ‎April 13, 2021

@Carving wrote:

I am struggling with depreciating assets in Quickbooks Premier Desktop 2020. The instructions that I have been able to find on Quickbooks Support are the Online version, not the Destop version. One comment even stated that the “Track depreciation of this asset” function is not available in the Canadian version.

I have created a new Account number 17101 under “Accum Depr – Furn & Equip” (I assume this the correct location) but based on the Online instructions there is no dropdown in the Desktop version for "Account Type" to select “Other Expense” nor “Detail Type” to select “Depreciation”.

On the Desktop version when you create the account there is a question “Should I enter an opening balance”. Opening this up it states “if you purchased the asset before your Quickbooks start date, do not create a transaction to put money in the account". So I did not enter any amount.

Moving to “Make General Journal Entries”. On this screen do I use the new account number created? However, if I want to depreciate the asset over a number of years, then what amount should I show in the “Debit” column (I assume this is the right column to enter the amount). Is there anything else I need to enter? What do I do in subsequent years? Do I have to follow these steps in subsequent years until the asset is fully depreciated?

As you can gather, I am not an accountant and I am doing this for a non-profit group. Any assistance would be greatly appreciated. Regards.

Accumulated Depreciation is a Fixed Asset account that goes negative each time it is credited from the Depreciation Expense debit. It is used just to accumulate the depreciation you take , usually on an annual basis by debiting the Depreciation Expense account. Set up Depreciation as an Other Expense and it will appear at the bottom of your P&L below net operating profit.

In desktop there is only an account name and account type. And there are no dropdowns. US versions of desktop have Fixed Asset Manager where you can keep track of specific assets although they can be tracked simply as their own F/A account. Canadian versions m ight not have FAM since Canadian depreciation is vastly different than anything we have here in the US. We have pretty much straight line depreciation and as I have seen, Canada has a sliding scale (especially for vehicles) where the % deductible changes each year of ownership.

But, all is not lost, as you would make a Journal Entry at year end that debits Depreciation Expense per your rules and credits Accumulated Depreciation

View solution in original post

john-pero · ‎April 13, 2021

The existing account 62810 should be sufficient to track the depreciation expense of all assets. What I meant by "Other Expenses" was the account type if you were adding Depreciation Expense as a new account and wanted it at the bottom on reports. You could track more than one kind as A and B sub accounts but it is not necessary

Account "type" is Bank, Fixed Asset, Long Term Liability, Other Expense, etc, etc. You would see these choices when adding new accounts or editing existing ones.

View solution in original post

john-pero · ‎April 13, 2021

@Carving wrote:

I am struggling with depreciating assets in Quickbooks Premier Desktop 2020. The instructions that I have been able to find on Quickbooks Support are the Online version, not the Destop version. One comment even stated that the “Track depreciation of this asset” function is not available in the Canadian version.

I have created a new Account number 17101 under “Accum Depr – Furn & Equip” (I assume this the correct location) but based on the Online instructions there is no dropdown in the Desktop version for "Account Type" to select “Other Expense” nor “Detail Type” to select “Depreciation”.

On the Desktop version when you create the account there is a question “Should I enter an opening balance”. Opening this up it states “if you purchased the asset before your Quickbooks start date, do not create a transaction to put money in the account". So I did not enter any amount.

Moving to “Make General Journal Entries”. On this screen do I use the new account number created? However, if I want to depreciate the asset over a number of years, then what amount should I show in the “Debit” column (I assume this is the right column to enter the amount). Is there anything else I need to enter? What do I do in subsequent years? Do I have to follow these steps in subsequent years until the asset is fully depreciated?

As you can gather, I am not an accountant and I am doing this for a non-profit group. Any assistance would be greatly appreciated. Regards.

Accumulated Depreciation is a Fixed Asset account that goes negative each time it is credited from the Depreciation Expense debit. It is used just to accumulate the depreciation you take , usually on an annual basis by debiting the Depreciation Expense account. Set up Depreciation as an Other Expense and it will appear at the bottom of your P&L below net operating profit.

In desktop there is only an account name and account type. And there are no dropdowns. US versions of desktop have Fixed Asset Manager where you can keep track of specific assets although they can be tracked simply as their own F/A account. Canadian versions m ight not have FAM since Canadian depreciation is vastly different than anything we have here in the US. We have pretty much straight line depreciation and as I have seen, Canada has a sliding scale (especially for vehicles) where the % deductible changes each year of ownership.

But, all is not lost, as you would make a Journal Entry at year end that debits Depreciation Expense per your rules and credits Accumulated Depreciation

Carving · ‎April 13, 2021

John-.Pero (Community Champion)

Thank you so much for your prompt response. It is not that I have set up other accounts but to ensure that I follow your recommendations I would ask that you clarify a few questions. When you say to set up “Depreciation” as an “Other Expense” would the following existing accounts 62810 “Depr & Amort– Allowable” or 65100 “Other Types of Expenses work? If not, then set up a new account titled "Depreciation”. If I have two categories then would I need to set up “Depreciation Expense – A” and “Depreciation Expense – B”? I appreciate your patience and understanding. Regards.

john-pero · ‎April 13, 2021

The existing account 62810 should be sufficient to track the depreciation expense of all assets. What I meant by "Other Expenses" was the account type if you were adding Depreciation Expense as a new account and wanted it at the bottom on reports. You could track more than one kind as A and B sub accounts but it is not necessary

Account "type" is Bank, Fixed Asset, Long Term Liability, Other Expense, etc, etc. You would see these choices when adding new accounts or editing existing ones.

Carving · ‎April 14, 2021

Thank you again! With your valued input I can hopefully enter our depreciated items successfully. Regards.

Carving · ‎December 19, 2021

Hi John.

Now that it is nearing yearend I am looking at our previous correspondence on depreciation and I am still struggling with the correct setup. For example, I have set up two accounts for "Dust Collectors". One is 62811 "Depr & Amor - Dust Collectors". The other is 17101 "Accum Depr - Dust Collectors". Let's assume that the total asset value is $900.00 and we depreciate the asset over 3 years giving us an annual depreciation amount of $300.00. To create a journal entry at year end I would show a debit of $300 against 62811 ""Depr & Amor - Dust Collectors" and a credit of $300 against 17101 "Accum Depr - Dust Collectors". If the foregoing is correct then am I to assume that the 17101 "Accum Depr - Dust Collectors" increases annually over 3 years until it matches the total asset value? If so, is that all that is required? Is there no connection to the original purchase of the dust collectors? As I have humbly stated previously, I am not an accountant and I do appreciate your patience and assistance in getting this right. Regards.

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