You can use a General Journal transaction to capture the depreciation of an Asset. There are different ways of depreciating assets so your accountant will have your specific schedule for your business or investments. Many property investors get Quantity Surveyor reports for this area also.

1. Setup an Asset Account for depreciation of each Asset type. For example an Asset: Air Con would have a depreciation Account called Asset: Air Con Accum Deprec. So your account names aren’t too long we have abbreviated Accumulated Depreciation to simply Accum Deprec.
2. Setup an Expense Account for booking depreciation expense. For example Expense: Depreciation
3. Add the following General Journal transaction:
   • CREDIT Asset: Air Con Accum Deprec $x
   • DEBIT Expense: Depreciation $x

This transaction has offset your Asset: Air Con category by the depreciated amount and also have the effect of booking the expense to your Profit and Loss.

Additional

Asset:Air Con + Asset:Air Con Accum Deprec = Residual Air Con Asset Value
Note that the Asset:Air Con Accum Deprec above will be a negative number. Crediting an Asset account creates a negative amount in accounting systems (reduces it’s balance).

Depreciation General Journals are normally done at the end of your reporting period. For some businesses this might be monthly and for others once a year.