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Depreciate assets in QuickBooks Online

by Intuit Updated 4 weeks ago

In QuickBooks Online, after you set up your assets, you can record their depreciation. QuickBooks Online doesn't automatically depreciate fixed assets. Instead, you need to manually track depreciation using journal entries.

Note: Calculating asset depreciation is difficult. Your accountant knows the best methods. We recommend working with them to regularly review how you track depreciation.

Step 1: Check to see if you already have a depreciation account

To avoid creating duplicates, make sure you don’t already have a depreciation account.

  1. Go to Settings Settings gear icon. and select Chart of accounts (Take me there).
  2. In the Filter by name or number field, enter Depreciation.
  3. If you see an account with Depreciation in the Name column, Other expense in the Account Type column, and Depreciation in the Detail Type column, then your chart of accounts is already set up. You can skip to Step 3.

Step 2: Set up a depreciation account

If you haven’t already, create an account to track depreciation. If you don’t have one already, create an account to track depreciation.

  1. Go to Settings Settings gear icon. and select Chart of accounts (Take me there).
  2. Select New.
  3. Add a name for your depreciation account in the Name field. 
  4. Select Other expense in the ▼ dropdown from the Account Type field.
  5. Select Depreciation in the ▼ dropdown from the Detail Type field.
    Note: You can put a description in the Description field to add information about this account.
  6. Select Save and Close.

Step 3: Record the depreciation

Now you have accounts to track your assets and their depreciation. At the end of the year after you've talked to your accountant, create a journal entry to record the lost value.

  1. Select + New. Then select Journal entry.
  2. On the first line, select the asset account you use to track the loan from the Account ▼ dropdown. Enter the depreciated amount in the Credits column.
  3. On the second line, select the Depreciation account you just created from the Account ▼ dropdown. Enter the same depreciated amount in the Debits column.
  4. Select Save.

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