Assets

Saasu has the building blocks of an asset register for managing fixed assets. The following highlights ways you can use Saasu to manage your assets.

Fixed Assets

Generally, fixed assets would be bundled into their appropriate groupings. These may be determined by their depreciation method, asset type, or some other procedural method you have in your business.

Here is an example of two accounts created to represent a Fixed Asset grouping:

  • Asset: Computers.
  • Asset: Computers Accum. Depr.

For example, if a computer has been owned for a year and depreciated 33%, the account balances would look like this:

  • Asset: Computers $999
  • Asset: Computers Accum. Depr. -$333

Depending on your accounting policy, each month, quarter, or year you would depreciate the assets and put the written down portion to an expense account (eg Expense:Depreciation).

Classify Fixed Assets

To help track the transaction(s) that relate to fixed assets, you can create a tag called FixedAssets and apply it to any purchase you enter. Then, when you run reports or lists of transactions, you can filter these according to this FixedAssets tag. Another useful tag might be one that denotes which depreciation schedule the asset belongs to (eg DS1 might represent Depreciation Schedule 1 – Computers).

Fixed Asset Documentation

A simple task like scanning your warranties and licenses and adding them as attachments to your Fixed Asset purchase transactions can be very helpful. You may need this for compliance reasons or simply for the convenience of being able to go back and refer to them for claims or licensing information. For example, if you buy a computer you might scan the warranty, product key details, and the shipping slip which has the breakdown of components.

Tracking Fixed Asset Events

You can use activities to capture important information and events that relate to the asset over its life cycle:

  • Initial depreciation rate you plan to apply as determined by your adviser or regulatory authority.
  • Capture information about maintenance events.
  • Capture serial numbers or licenses for upgrades.
  • Refer to other transactions that relate to this asset (eg capital improvements).

Capital Appreciation

An increase in the price or value of assets can be captured by booking a journal entry based on how your advisor would like to account for the increase in value. Capital appreciation can be passive and therefore is different to a capital gain which is the profit achieved by selling an asset. Capital appreciation may or may not be booked in your financials. It depends on your situation, tax zone and advice received. Generally if booking a revaluation of the asset it is then “recognised” but not “realised”. Once the asset is sold, the appreciation since the date of initially buying the asset becomes a “realised” gain.

Appreciate Assets

An increase in the price or value of assets can be captured by booking a journal entry based on how your advisor would like to account for the increase in value. Capital appreciation can be passive and therefore is different to a capital gain which is the profit achieved by selling an asset. Capital appreciation may or may not be booked in your financials. It depends on your situation, tax zone and advice received. Generally if booking a revaluation of the asset it is then “recognised” but not “realised”. Once the asset is sold, the appreciation since the date of initially buying the asset becomes a “realised” gain.

You can use a General Journal transaction to capture the appreciate or capital gain of an asset. There are different ways of doing this so do not rely on this example without seeking advice from your advisor specific to your business. Many property investors also get Quantity Surveyor reports for this area.

How to:

  1. Set up an Asset account for the appreciation of the Asset. For example, an Asset: Collectables would have an appreciation account called Asset: Collectables Accum Apprec. To ensure your account names aren’t too long, we have abbreviated Accumulated Appreciation to Accum Apprec.
  2. Set up an Income account for booking appreciation income. e.g. Income: Appreciation
  3. Add the following General Journal transaction:
    ACCOUNT TAX CODE DEBIT CREDIT
    Asset: Collectables Accum Apprec –No Tax Code– 100.00
    Income: Appreciation –No Tax Code– 100.00

    NOTE: The amounts entered don’t include any tax.

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

Asset:Collectables + Asset:Collectables Accum Apprec = Total Collectables Asset Value

Appreciation journals are normally done at the end of your reporting period. For some businesses this is monthly, for others yearly.

TIP: If you have lots of assets you can put them all in a single journal. Then, next year you simply use the Duplicate button on the journal to make a copy, edit each line, and save it for the new year. You might also add in new assets at this time. Sometimes you can run a journal for each appreciation method or group of common assets to break this up a little. This is useful if you have lots of assets to manage.

Depreciate Assets

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

How To:

  1. Set up an Asset account for the depreciation of each Asset type. For example, an Asset: Air Con would have a depreciation account called Asset: Air Con Accum Deprec. To ensure your account names aren’t too long, we have abbreviated Accumulated Depreciation to Accum Deprec.
  2. Set up an Expense account for booking depreciation expense (eg Expense: Depreciation).
  3. Add the following General Journal transaction:
    ACCOUNT TAX CODE DEBIT CREDIT
    Asset: Air Con Accum Deprec –No Tax Code– 100.00
    Expense: Depreciation –No Tax Code– 100.00

    NOTE: The amounts entered don’t include any tax.

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

Asset:Air Con + Asset:Air Con Accum Deprec = Residual Air Con Asset Value

NOTE: The Asset:Air Con Accum Deprec above will be a negative number in the Balance Sheet. Crediting an Asset account creates a negative amount in accounting systems (reduces it’s balance).

Depreciation journals are normally done at the end of your reporting period. For some businesses this is monthly, for others yearly.

TIP: If you have lots of assets you can put them all in a single journal. Then, next year you simply use the Duplicate button on the journal to make a copy, edit each line, and save it for the new year. You might also add in new assets at this time. Sometimes you can run a journal for each depreciation method or group of common assets to break this up a little. This is useful if you have lots of assets to manage.