Fixed Asset Account Simplification?

Anonymous · ‎May 13, 2021

We've been using QBO for about two years now and I'm pretty comfortable with it at this stage.

However, I'm constantly tweaking things as I go.

One of the things I'm looking at now is the level of specificity with which I've set up my Chart of Accounts.

Currently I have individual Fixed Asset accounts for each "major" fixed asset, while "minor" fixed assets share an account.

For example, each of our trucks and tractors has its own fixed asset account, plus its two sub accounts (Original Cost & Depreciation). In turn, each of these fixed asset accounts is grouped under a general Fixed Asset Category (e.g. tractors go under "Farm Equipment" and trucks go under "Vehicles").

The result is a good level of "at-a-glance" specificity for these more expensive assets, but also a whoooooooole lot of fixed asset accounts.

In other words, my CoA for three trucks results in TEN fixed asset accounts:

-Vehicles

--Truck A

---Original Cost

---Accumulated Depreciation

--Truck B

---Original Cost

---Accumulated Depreciation

--Truck C

---Original Cost

---Accumulated Depreciation

My question is: is there really any point to doing this? Do you guys generally just have a Fixed Asset account called "Vehicles" with a sub account for Original Cost & Accumulated Depreciation and just add and remove individual assets as you go? If so, how do you track each individual fixed asset in that category?

Long post but I hope it makes sense. I'd have a lot less FA accounts if I did it that way.

AlexV · ‎May 13, 2021

Hi PVOLLC!

Thanks for posting again here. Let me share some details about tracking fixed assets in QuickBooks Online.

When setting up an asset account, QuickBooks Online creates two sub-accounts to track the cost and depreciation if you checked the Track depreciation of this asset box. Then, you can enter the current value of your asset in the Original cost field and the as of date.

Also, QuickBooks Online won't depreciate fixed assets automatically. You'll need to manually track them using journal entries. I suggest working with your accountant to ensure accuracy.

Go to the + New button and select Journal entry.
Select the asset account from the Account dropdown on the first line. Enter the depreciated amount in the Credits column.
On the second line, select the Depreciation account and enter the same depreciated amount in the Debits column.
Tap Save.

IRS also has an article you can check on how to depreciate. You can click this link: https://www.irs.gov/publications/p946.

Additionally, you may visit our QBO Articles page. From there, you'll see different articles or references in managing your business with QuickBooks Online.

Post again here if you need more help. Take care!

Anonymous · ‎May 14, 2021

I'm sorry but is this a bot answer? With all due respect it has zero to do with what I asked.

I didn't ask about the OC and AD sub accounts or about automated depreciation. I also didn't ask anything about taxes or the IRS.

What I asked is if users tend to set up one fixed asset account for ALL fixed assets of a given type instead of having separate fixed asset accounts for each particular fixed asset.

KeeganF · ‎January 28, 2022

It might be a little late to help, but I'll address your question now regardless. If you have a separate fixed asset ledger keeping track of each individual asset (commonly an Excel spreadsheet or similar) there is no need to segregate individual items within a category in QuickBooks.

Commonly I'll set up just one "Vehicles" account (with cost and depreciation subaccounts) with the individual vehicles tracked outside of the QuickBooks general ledger accounts, as an example. You just want to be sure that this is tracked properly and that depreciation is tracked and allocated properly.

Anonymous · ‎May 11, 2022

Coming in a little late in this conversation but sounds to me like there is no shortcut or simplification, each asset has to be recorded and tracked separately, whether in QB or offline on a spreadsheet!

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Fixed Asset Account Simplification?