Fixed Asset Management in QuickBooks®
The value and costs associated with fixed assets are simplified by keeping accurate records of capitalization, depreciation and major repairs and maintenance. Tracking changes to property, plant and/or equipment also decreases time and energy spent in calculating these amounts for tax returns, and may benefit the company as it reflects current data regarding the most integral parts to continuing business operations. QuickBooks® offers various levels of fixed asset management, depending on the related need and familiarity of the user with the software.
Fixed Asset List and Depreciation Accounts
The simplest method of tracking the presence of fixed assets for a business is the Fixed Asset list. This feature is intended to list all major assets (e.g. those items integral to business operations and with a value over a set capitalization dollar limit), as well as their associated purchase price, sale price (if applicable), item number, years of service, and other applicable information. QuickBooks® Fixed Asset list also allows for customizable fields when entering a new item, adding more information as the user desires.
The Fixed Asset list organizes property, plant and equipment and presents the items in a format useful for report generation; for instance, instead of creating separate accounts for each of a company’s vehicles, the vehicles are listed under a single account (Fixed Assets) with optional listing of the individual items in a generated Balance Sheet report.
The flexibility of the General Ledger feature in QuickBooks® also allows for manual entries of asset depreciation. After the Accumulated Depreciation and Depreciation Expense accounts are created within the Chart of Accounts, regular entries can be made to decrease the value of assets on the fixed asset list. This method of tracking depreciation demands external calculation separate from QuickBooks®, such as a spreadsheet or other software calculating depreciation based upon a predetermined method.
QuickBooks® Fixed Asset Manager
QuickBooks® offers an additional feature for managing fixed assets: Fixed Asset Manager. This integrated software can function separately from or as an extension of a QuickBooks® file, and offers a solution to manual calculations and entries of depreciation. Fixed Asset Manager offers five standard depreciation methods (including federal and state, current adjusted earnings, book value and alternative minimum tax), and assists in tax return depreciation calculations by including a number of applicable tax depreciation methods.
The calculations related to determining gain or loss on an item are automatically generated within Fixed Asset Manager upon submitting sale or disposition information, and if the user chooses to use the software as an extension of a QuickBooks® file, it will automatically populate the ledgers with the related data. Fixed Asset Manager also easily exports as a .CSV or Excel file, and can operate as a forecasting tool for future book value and tax write-offs that may be utilized in coming years. The Schedule and Calendar features present future depreciation information in a clear and organized format for the user.