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Level 4

How does "track depreciation of this asset" work?

Despite reading, I'm not sure I understand how this feature works in terms of time. Let's say I buy an asset that has an original cost of $1,000.00. If I select "track depreciation of this asset" and enter $100.00 in the "value as of" field one year later, am I telling QuickBooks that the asset has a ten-year useful life?

Note - I'm just asking about the mechanics of the feature on QuickBooks; not looking for advice on assets and depreciation as a tax or accounting matter.

Thanks.
Solved
Best answer December 02, 2019

Best Answers
Highlighted
Level 10

How does "track depreciation of this asset" work?

@PVOLLC @JonpriL 

 

Re: How does "track depreciation of this asset" work?

 

There is no feature in QBO that will track asset depreciation. There is no Fixed Asset List to track assets or accumulated depreciation of the assets. You will have to manually write Journal Entry to write off depreciation expense. You can set up and make Recurring Transactions, that's what normally done.

 

So, "Track depreciation of this asset" checkbox you're seeing while creating a Fixed Assets account, is mainly for creating new accounts for both Fixed Asset and Accumulated Depreciation. And also recording Original cost and Accumulated Depreciation amount of old assets at the same time. That's all!

 

Create both Fixed Asset account and Accumulated Depreciation account at the same time.

 

View solution in original post

Highlighted
QuickBooks Team

How does "track depreciation of this asset" work?

Yes, vpcontroller has a point @PVOLLC.
 

Setting depreciation in QuickBooks Online is manual, you need to create a Journal entry to depreciate your asset account.

To make this automatically on a daily/monthly or annual basis, you can set the Depreciation Journal entry to recurring so it will be created automatically.

 

Recurring transactions are a way to quickly create different transactions with the same information that will happen on a regular occurrence.
 

You can set these transactions to record automatically. You can also create them manually from the recurring template.
 

Your accountant knows the best methods. We recommend working with them to regularly review how you track depreciation. To make a recurring into a journal entry, please follow these steps below.
 

  1. Go to the Plus icon.
  2. Select the appropriate asset account under the Account column.
  3. Enter the needed information.
  4. Click Make recurring, then Save template.

You can check this article as your reference on how to Record and depreciate assets.
 

If you need anything else, feel free to hit the reply button. I’ll be right here to help.

View solution in original post

4 Comments 4
Highlighted
Moderator

How does "track depreciation of this asset" work?

You're on the right track, @PVOLLC!

 

Selecting the Track depreciation of this asset feature of your Fixed Asset account allows QuickBooks to accurately track the depreciation of your asset depending on the time of record.

 

In addition, here's an article you can read to learn more about how you can create your Fixed Asset account: Set Up an Asset Account in QuickBooks Online.

 

In case you need some related articles in managing your account, you can always visit our Reports and Accounting articles for reference.

 

You can always click the Reply button and leave a comment below if you have any other concerns.

Highlighted
Level 10

How does "track depreciation of this asset" work?

@PVOLLC @JonpriL 

 

Re: How does "track depreciation of this asset" work?

 

There is no feature in QBO that will track asset depreciation. There is no Fixed Asset List to track assets or accumulated depreciation of the assets. You will have to manually write Journal Entry to write off depreciation expense. You can set up and make Recurring Transactions, that's what normally done.

 

So, "Track depreciation of this asset" checkbox you're seeing while creating a Fixed Assets account, is mainly for creating new accounts for both Fixed Asset and Accumulated Depreciation. And also recording Original cost and Accumulated Depreciation amount of old assets at the same time. That's all!

 

Create both Fixed Asset account and Accumulated Depreciation account at the same time.

 

View solution in original post

Highlighted
Level 4

How does "track depreciation of this asset" work?

Okay thanks guys. The part I'm interested in is having automatic tracking of depreciation done so that, at any given point in time, my Balance Sheet will accurately reflect the value of my assets.

 

It sounds like what you're saying is that I can schedule Recurring Transactions in the Accumulated Depreciation accounts that I create with the Track Depreciation feature, correct?

Highlighted
QuickBooks Team

How does "track depreciation of this asset" work?

Yes, vpcontroller has a point @PVOLLC.
 

Setting depreciation in QuickBooks Online is manual, you need to create a Journal entry to depreciate your asset account.

To make this automatically on a daily/monthly or annual basis, you can set the Depreciation Journal entry to recurring so it will be created automatically.

 

Recurring transactions are a way to quickly create different transactions with the same information that will happen on a regular occurrence.
 

You can set these transactions to record automatically. You can also create them manually from the recurring template.
 

Your accountant knows the best methods. We recommend working with them to regularly review how you track depreciation. To make a recurring into a journal entry, please follow these steps below.
 

  1. Go to the Plus icon.
  2. Select the appropriate asset account under the Account column.
  3. Enter the needed information.
  4. Click Make recurring, then Save template.

You can check this article as your reference on how to Record and depreciate assets.
 

If you need anything else, feel free to hit the reply button. I’ll be right here to help.

View solution in original post

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