A category is a class of assets that depreciate the same way, for example Motor vehicles, Computers or Furniture and fittings. It sets the default depreciation for new assets, and the four accounts its assets post to.
Before you start
- You need the Asset Setup permission.
- The accounts must exist in the chart of accounts. Business Sensor creates a starter set: Property, Plant and Equipment (Fixed Asset), Accumulated Depreciation (Contra Asset), Depreciation Expense and Gain or Loss on Disposal of Fixed Assets. You can add more specific ones, such as Motor Vehicles — Cost.
Steps
- Go to Accounting → Fixed Assets → Categories and click New category.
- Enter a Name and a short Code (e.g. VEH).
- Choose the Default method and useful life in months (e.g. 48 for four years). Add a salvage % if the assets keep some value at the end.
- Choose First month:
- By days in service charges part of the first month (recommended).
- Whole first month charges the full month.
- Whole month if in service by the 15th charges nothing that month after the 15th.
- Choose the four accounts:
- Cost: a Fixed Asset account.
- Accumulated depreciation: a Contra Asset account.
- Depreciation expense: an expense account.
- Gain or loss on disposal: usually Other Income.
- Click Save.
Tips
- Typical useful lives: computers 36 months, vehicles 48–60, furniture 60–120, buildings 240–600. Your accountant or local tax rules may set others.
- Each asset can override its category's method, life and salvage value.
- Make a category inactive to stop offering it for new assets. Existing assets keep it.
Common problems
- "The cost account must be a Fixed Asset account" (or a similar message for another account): the account has the wrong type. Choose another, or change its type in the chart of accounts.
- "That cost account belongs to a single legacy asset". Desktop-era assets each had their own account. Use a shared account such as Property, Plant and Equipment.
- The cost account can't be changed. Assets in the category are already recorded against it. Create a new category instead.
- "Delete" is missing. The category has assets. Make it inactive instead.