How to account for fixed assets?

Conchita_galvan

How do you account for your company's fixed assets? How do you keep track of them? How often do you update your records?

blackpanda111

Assuming you want to know how to bookkeeping for fixed assets:

When you purchase a fixed asset, you need to debit the asset account and credit the cash or accounts payable account.

You will then need to set up depreciation schedules for each of your assets. This schedule will list the expected life of the asset, salvage value, and depreciation method.

Once you have your depreciation schedule, you should record depreciation expense on a monthly or quarterly basis. To do this, you will debit depreciation expense and credit the corresponding asset account.

but_daglarogle

The main ways to account for fixed assets are the following:

1) depreciation - over the useful life of the asset, the account is debited for the cost of the asset and credited for the accumulated depreciation

2) impairment - if the asset becomes impaired, the account is written down to its fair value

3) disposal - when the asset is disposed of, the account is debited for the disposal proceeds and credited for the accumulated depreciation