Journal entry is required for depreciation in quickbooks as well as FAS for peachtree also can be used to automatically record depreciation entries
"Fixed Asset Manager" number in Intuit Quickbooks. Must have the Fixed Asset Manager add-on to modify/manage.
Think along the lines of Compound Interest (but in reverse) For example- Asset of 100 depreciating by 20% p.a On Straight Line Year1 Asset 100 Depreciation 20 Year2 Asset 80 Depreciation 20 Year3 Asset 60 Depreciation 20 Year4 Asset 40 Depreciation 20 Year5 Asset 20 Depreciation 20 Year6 Asset 0 On Diminishing Balance Year1 Asset 100 Depreciation 20 Year2 Asset 80 Depreciation 16 Year3 Asset 64 Depreciation 12.8 Year4 Asset 51.2 Depreciation 10.24 Year5 Asset 40.96 Depreciation 8.192 Year6 Asset 32.77 .... and so on until the asset tends to 0 (will never technically reach 0)
Depreciation expense is neither an asset or liability. It is an expense.
Depreciating asset is that asset which is utilizing by business in generating revenue and cost of asset is allocating to income statement through depreciation.
Book Value is the difference between the cost of an asset and the accumulated depreciation of that asset.
When the asset is disposed of the Accumulated Depreciation is subtracted from the cost of the asset. Journal Entries: If Sold at a Profit: Dr Accumulated Depreciation (All Depreciation) Dr Bank/ Recievable (Amount received for Asset) Cr Asset (Carrying Value on Balance Sheet) Cr Profit on Asset Disposal (Balancing Figure) If Sold at a Loss: Dr Accumulated Depreciation (All Depreciation) Dr Bank/ Recievable (Amount received for Asset) Dr Loss on Asset Disposal (Balancing Figure) Cr Asset (Carrying Value on Balance Sheet) Please note there may also be current year depreciation
Depreciation of a Fixed Asset is always carried on the Balance Sheet in the Accumulated Depreciation Account (contra-asset). It is never deducted from the Fixed Asset.One reason for the Accumulated Depreciation account is that eventually, individual assets will be fully depreciated and their net values will be zero. If the depreciation were deducted from the asset, it would "fall off" the balance sheet. The accumulated depreciation account allows the assets to remain at book value in the asset account to maintain their visual presence on the books.The depreciation entry debits depreciation expense and credits accumulated depreciation.
Depreciation expense reduce the cost of asset through income statement for the useful life of asset and accumulated depreciation account is contra account for asset account in balance sheet to show the total amount of depreciation charged.
The net book value of a depreciable asset is calculated by deducting the accumulated depreciation from the original cost of the asset. Accumulated depreciation is the total depreciation expense recorded over the life of the asset. This calculation allows for the determination of the asset's value at a specific point in time.
Depreciation of any asset is charged to income statement till the actual date of disposal of asset and after that date depreciation is not charged to income statement.
Formula for straight line depreciation is as follows: Depreciation = (Cost of asset - salvage value) / useful life of asset
Depreciation on Fixed Asset (Furniture, Building) are considered as Non-Current Assets