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Add and manage fixed assets in QuickBooks Online Advanced

by Intuit•13• Updated 2 weeks ago

Learn how to add, manage, dispose of, and delete Fixed assets (Take me there) in the QuickBooks Online Advanced app.

Fixed assets are physical assets a business owns and uses to generate income. Fixed assets have a "useful life" of one year or more. Examples of fixed assets include buildings, machinery, vehicles, and furniture. Products you sell aren’t fixed assets.

The app automates how you manage and track your fixed assets, calculate book depreciation, and generate reports.

In this article, you'll learn how to:

Add a single fixed asset

Follow this link to complete the steps in product Open this link in a new window

  1. Select Add an asset.
  2. Fill out the details for your fixed asset:
    • Asset name
    • Description (optional)
    • Non-depreciable asset, select this checkbox if the asset is non-depreciable.
      Note: Some of the fields won't be applicable if you select this option.
    • Purchase price
    • Purchase date
    • Depreciation start date
    • Depreciation method
    • Useful life
    • Salvage value
    • Accumulated depreciation amount, if you’re adding a fixed asset that has already started depreciating. You can manually add the accumulated depreciation amount, or select the Use auto-generated depreciation checkbox if you want the app to calculate the accumulated amount for you since the starting depreciation date. In either case, make sure this amount matches the manual entries you have already made to account for depreciation.
    • Asset account
    • Accumulated depreciation account
    • Depreciation expense account
  3. Select Save.

The app automatically creates the depreciation schedule, and the depreciation entries are posted on the 1st day of each month. (For example, the depreciation entries for April post on May 1st).

Add multiple fixed assets

Follow this link to complete the steps in product Open this link in a new window

  1. Select Add multiple assets.
    Note: If you have already added assets, you'll find this option on selecting the Dropdown arrow icon. next to Add an asset.
  2. Select any of the fields on line 1 to start. This is your first fixed asset.
  3. Enter the details for the asset in the fields or copy from an existing spreadsheet:
    • Non-depreciable asset, select this checkbox if the asset is non-depreciable.
      Note: Some of the fields won't be applicable if you select this option.
    • Asset name
    • Description (optional)
    • Purchase price
    • Salvage value (optional)
    • Purchase date
    • Depreciation start date 
    • Depreciation method
    • Useful life
    • Accumulated depreciation amount, if you’re adding a fixed asset that has already started depreciating. The app calculates the depreciation schedule based on this amount.
    • Asset account
    • Depreciation expense account
    • Accumulated depreciation account
  4. Repeat step 3 to enter as many fixed assets as you need in separate lines.
  5. When you're finished, select Save. The app will import your assets to the fixed assets page.

Note: Keep the Fixed Assets page open while the app uploads all your assets.

Create fixed asset drafts in the app

You can manually create a draft for a fixed asset. You or an accountant can review the draft, and either approve or discard it.

Follow this link to complete the steps in product Open this link in a new window

  1. Select Add an asset.
  2. Fill out the details for your fixed asset and select Save as draft.
  3. Select Review for the asset draft.
  4. Review the details of the draft that were extracted from the expense transaction. Change or enter any other details, such as Depreciation method or Account details.
  5. Once you're done, select Save.
  6. Immediately, the asset begins to depreciate.
    • To view the schedule, select View. The schedule displays to show you the entire lifecycle of the asset.
    • Select any of the Dropdown arrow icon. arrows to expand details on any depreciation period.
    • Select X to close the schedule.

View the depreciation schedule and posted transactions

We'll automatically create the depreciation schedule and the depreciation entries automatically post on the 1st day of each month. (For example, the depreciation entries for April will be posted on May 1st).

Follow this link to complete the steps in product Open this link in a new window

  1. Find the asset you want to see the schedule and transactions for and select View.
  2. Go to Schedule and select the Dropdown arrow icon. arrow for each year to view the schedule in detail.
  3. You can then view the posted transactions month-wise. 

Accumulated depreciation for assets with prior depreciation

The app uses the Purchase date, Useful life, and Depreciation method to calculate the accumulated depreciation amount. It uses the mid-month convention for both the year when a fixed asset is acquired and the year when the asset is disposed of.

For example:

  • Depreciation begins on the first day of the same month for assets with a Depreciation start date in the first half of the month (days 1 through 15).
  • Depreciation starts on the first day of the following month for assets with a Depreciation start date in the second half of the month (day 16 through the end of the month).

Note: It’s important to cross-verify this calculated amount with your existing records. If there’s a discrepancy, you’ll need to make an adjusting entry to help ensure your books align with the calculated depreciation.

Dispose and delete options for fixed assets

In addition to adding and managing fixed assets, the app lets you dispose of or delete fixed assets that are no longer in use.

Dispose option

This option allows you to record the disposal of a fixed asset and calculate any gain or loss on the sale of the asset. When you dispose of a fixed asset, it means that the asset is no longer being used for generating income and has either been sold or scrapped.

Note: Once a fixed asset is disposed of, you can't edit or restore it.

To use the dispose option:

Follow this link to complete the steps in product Open this link in a new window

  1. Find the asset you want to dispose of and select the Action dropdown â–Ľ.
  2. Select Dispose.
  3. Enter the Disposal date, Selling price, and Selling fee.
  4. Select Show summary.
  5. Check all the calculations, including the Profit/loss and confirm that you want to dispose of the asset.
  6. Manually post the required journal entries to record the disposal of your asset, including:
    • Clearing out the asset and its accumulated depreciation from your balance sheet.
    • Recording any proceeds from the sale of the asset.
    • Recording any gain or loss in your income statement.
  7. Select Dispose.

Note: The app uses the mid-month convention when a fixed asset is disposed of (depreciation for the full month will be recorded if the asset is disposed of after the 15th and no depreciation will be recorded if an asset is disposed of before the 15th).

Delete option

Be aware, the delete option is different from the disposal option. When you delete a fixed asset, you've completely removed it from the fixed assets list, as well as all related transactions. This is useful if you accidentally add an asset.

Note: Once you delete a fixed asset, you can't retrieve it. Therefore, we recommend you use the delete option with caution and only when necessary.

To use the delete option:

Follow this link to complete the steps in product Open this link in a new window

  1. Find the asset you want to dispose of and select the Action dropdown â–Ľ.
  2. Select Delete.
  3. Select Delete asset to confirm that you want to permanently delete the asset and all related transactions in the prompt.

View fixed asset reports

You or another user, such as a finance lead, can review fixed asset reports to better plan for capital expenditures in the future, or for tax filing.

Follow this link to complete the steps in product. Open this link in a new window

  1. In the search bar, search for and open either the Fixed Asset List or Fixed Asset Depreciation Detail report.
  2. Customise or filter the report as needed.

Learn the depreciation method calculations in QuickBooks

Learn how Fixed Assets calculate depreciation under various methods.

The Fixed Asset feature in QuickBooks helps simplify the process of tracking and managing fixed assets, including depreciation calculations. QuickBooks Online Advanced can automatically calculate and track depreciation based on the chosen method and other relevant information.

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

Here’s the 2 depreciation calculation methods for QuickBooks Fixed Assets.

Straight Line

The straight-line method depreciates assets evenly over their useful lives by providing a predictable way to calculate depreciation. It’s suitable for assets that wear out uniformly over time, like office furniture, buildings, computers, vehicles, and machinery.

Formula: The annual depreciation expense is calculated as: (Cost – Salvage Value) / Useful life. For example, if a machine costs GBP £10,000, has no salvage value and has an expected useful life of 5 years, the annual depreciation would be (GBP £10,000 - GBP £0) / 5 = GBP £2,000. Divide this final amount by 12 to get the monthly charge to use in the depreciation schedule for your Fixed Asset.

Reducing Balance

For this method of accelerated depreciation, you will need to enter a deprecation rate. We will use this number to calculate depreciation rather than the useful life. The useful life will be set to 50 years. The depreciation schedule will end as soon as one of the following happens:

  • The 50-year limit is reached—any remaining depreciation will be applied in the 50th year.
  • Salvage value (if entered) is reached.
  • Depreciation remaining is close to GBP ÂŁ12 per annum.

More info about depreciation calculations

Salvage value

The type of depreciation method used affects the salvage value.

For straight-line, the salvage value is used directly in the calculation. Salvage value is subtracted from the asset’s cost to determine the total depreciable amount. Then the amount is spread evenly over the asset’s useful life. 

For reducing balance depreciation method, the salvage value is used in the first year of the depreciation calculation (cost - salvage value)*25%. Then it is used as a floor for the asset’s book value. Depreciation stops when the asset’s book value reaches its salvage value.

When do we lower ‌net book value with reducing balance depreciation?

The book value is reduced annually, based on the depreciation start date you have chosen.

How auto-generated depreciation is calculated

The auto-generated depreciation calculation is based on the depreciation methods. It should be the same as what would have been calculated if the asset had been entered in QuickBooks as of the depreciation start date. It means that for the reducing balance method, a prior depreciation calculation, which was for 18 months, will have built in the net book value reduction to happen 12 months after the depreciation start date you selected. This prior depreciation amount doesn’t get posted to the books automatically, therefore if you need to account for this, you can do so using a journal entry.

Manually entering the prior depreciation calculation

You can manually enter the prior depreciation amount instead of using the auto-generated calculation. The depreciation calculation, including when the balance gets reduced, will always be based on what QuickBooks would have calculated if the asset had been entered in QuickBooks Online from the start.