A Depreciation document in AccountingSuite is designed to charge the depreciation for fixed assets, amortization for intangible assets and expense recognition for prepaid expenses or low value assets – all in one document.
Depending on the Depreciation frequency (set in the Asset group), the depreciation (or expense recognition) will be calculated on the last day of the time period:
- For Month – on the last day of each month;
- For Quarter – on March 31st, June 30th, September 30th and December 31st;
- For Halfyear – on June 30th and December 31st;
- For Year – on December 31st.
To maintain correct expense recognition, remember to record depreciation in the appropriate period during the whole lifetime of the asset or until the asset is disposed of.
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Book depreciation (or expense recognition) #
- Navigate to Asset management → Depreciation charge.
- Create a new document.
- Specify the time period of depreciation.
- Select the Asset type (only if you prefer to create separate documents for different Asset types).
- Select the date – it is important to select the date precisely, as the depreciation/ expense recognitions is calculated on the daily basis, regardless of the depreciation frequency set in the Asset group.
- Click Fill and the Depreciation document will be filled with the assets to be depreciated over the period selected in step 3. If you specified the asset type in step 4 – only the assets with the selected asset type will be filled in.
- The Depreciation details button opensa separate window with a detailed report of how Depreciation (or Amortization, or Expense recognition) charge was calculated.
- Save the document.
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Accounting #
Recording a Depreciation document for asset with “Fixed assets” or “Intangible assets” types creates the following transactions in the General Journal:
- Debits: Expense account
- Credits: Accumulated depreciation account
Recording a Depreciation document for asset with “Prepaid expenses” or “Low-value assets” types creates the following transactions in the General Journal:
- Debits: Expense account
- Credits: Asset account
Please note: the general ledger accounts for these bookings are stored in the Asset group.