Overview
Most fixed assets start from a bill: mark a bill line as a Fixed Asset line and the system capitalizes the cost and creates a draft asset for you. Assets bought outside Accounts Payable, or brought in from another system partway through their life, can be created directly from the Fixed Assets page. Either way, you then configure the depreciation schedule and post it over the asset's life.
The lifecycle at a glance: draft → active → completed (with disposed, cancelled, and voided as exits along the way; see Disposing, Revaluing, Cancelling, and Voiding Fixed Assets).
Before you start, you'll need at least one Fixed Asset Type set up. See Getting Started with Fixed Assets.
Step 1: Create the asset
Create the asset from a bill (Option A) or directly from the Fixed Assets page (Option B).
Option A: From a bill
On the Bill Create form, set the line's type to Fixed Asset and pick a Fixed Asset Type instead of an expense account.
When the bill posts, the capitalized cost is debited to the type's Asset Account, not expensed, and saving the bill creates one draft fixed asset per fixed-asset line, pre-populated from the bill:
Cost Basis: the line amount × quantity, plus tax when the tax code is non-recoverable
Currency and Location: from the bill
Start Date: defaults to the bill's posting date
Description: from the line item (this also appears on the depreciation journal lines)
Accounts, useful life, convention, method: defaults from the Fixed Asset Type
On the Bill Detail page, clicking a fixed-asset line opens the assets created for it, so you can click through and configure them.
Note on tax codes: If the line's tax code is recoverable, the tax posts to the tax account and isn't capitalized. If it's non-recoverable (or there's no tax code), the tax is rolled into the capitalized cost of the asset.
Option B: Directly, without a bill
Feature availability: Creating fixed assets without a bill must be enabled for your tenant. Reach out through the chat bubble or at support@softledger.com to turn it on.
Use New on the Fixed Assets page for an asset bought outside Accounts Payable, or brought in from another system partway through its life (for example, a migration).
The Acquisition section takes:
Type (required): supplies the accounts and depreciation defaults, like a bill line.
Cost Basis (required): the original cost of the asset.
Currency and Location (required).
Acquisition Date (required): the date the asset was bought. The Start Date defaults to it and can't be earlier.
Opening Accumulated Depreciation (optional): depreciation already taken before the asset came into SoftLedger. Must be less than the cost basis. Enter the remaining useful life, and SoftLedger depreciates Cost Basis − Salvage Value − Opening Accumulated Depreciation over it.
Offset Account (optional): set it to post an acquisition journal when the asset is activated. Leave it empty when the asset's balances are already on the GL, for example after a migration with opening balances.
Dimensions (optional): cost center, job, product, vendor, customer, and custom dimensions, used on every journal the asset posts.
Save as Active or Draft. The Save as toggle at the top of the form chooses how the asset is saved:
Active (default): the Depreciation section and schedule preview appear below the acquisition fields, so you enter the whole asset in one form. Save & Activate creates and activates it in one step, so you can skip Step 2.
Draft: the form shows the acquisition fields only. Save Draft creates a draft with no effect on the GL, seeded with the type's defaults. Later, the draft's Configure action opens the same form, where you can still edit the acquisition fields, and Activate sets the schedule.
Note: Users who can't activate assets always see the Draft form.
Acquisition journal
When an asset with an Offset Account is activated, SoftLedger posts one journal dated at the acquisition date:
Debits the Asset Account with the cost basis.
Credits the Accumulated Depreciation Account with the opening accumulated depreciation, if any.
Credits the Offset Account with the rest.
The journal belongs to the asset and shows as its Source. It can't be edited or deleted from Journals; voiding the asset reverses it.
Example: An asset bought for 10,000 with 4,000 already depreciated comes in with 24 months of useful life remaining, no salvage value, and Opening Balance Equity as the Offset Account. Activating it posts:
Account | Debit | Credit |
Asset Account | 10,000 |
|
Accumulated Depreciation Account |
| 4,000 |
Opening Balance Equity (Offset Account) |
| 6,000 |
SoftLedger then depreciates the remaining 6,000 over 24 months, or 250 a month.
Warning, avoid double-booking: Don't set an Offset Account for an asset whose cost and accumulated depreciation are already on the GL, such as assets loaded through opening balances. The acquisition journal would book them a second time.
Step 2: Configure the asset (draft → active)
Open the draft asset from its detail page (or straight from the bill) and choose Configure, then provide the depreciation setup:
Click the Fixed Assets button on Bill Detail or from the Fixed Assets tab to open this view:
Start Date (required): on or after the source bill's posting date, or the acquisition date for an asset created without a bill
Depreciation Method (required): Straight Line or Custom
Useful Life (Months) and Convention: required for straight-line
Salvage Value: optional residual value that's never depreciated; defaults to 0
Accounts: optional overrides of the type's defaults
Note: The asset needs a Location before it can be configured. For bill assets it comes from the bill, so set it on the bill first.
For straight-line, the form previews the generated schedule as you change the inputs. Submitting generates the schedule and moves the asset to active.
Choosing a convention (straight-line)
Monthly Prorated — the first and last months are prorated by day count, with full months in between. The schedule spans exactly the useful life.
Mid-Month — half a month's depreciation in the acquisition month, the remaining half in the trailing month. A useful life of N months produces N + 1 schedule lines.
Custom schedules
Choosing the Custom method lets you supply the schedule lines yourself. The lines must have unique dates on or after the start date, and their amounts must sum exactly to the depreciable base (Cost Basis − Salvage Value − Opening Accumulated Depreciation).
Step 3: Post depreciation
Each posted schedule line creates a journal debiting Depreciation Expense and crediting Accumulated Depreciation, and reduces the asset's Remaining Amount.
You can post lines from the asset's detail page, or in bulk from Fixed Assets > Fixed Assets > Fixed Asset Lines — filter on Status = pending and Schedule Date up to your close date, select all, and use the Post Journal bulk action. It's the same flow as posting Prepaid lines.
When every line has posted, the asset moves to completed.
Note: For an asset created from a bill, the bill must be approved before schedule lines can be posted.
Warning on Period close: An accounting period's Financial task can't be closed while any depreciation line dated in that period is still pending. Post your fixed asset lines as part of your close checklist.
Editing after activation
A draft or active asset can be edited, and allowed changes regenerate the pending schedule lines. Once any depreciation has posted, some fields lock:
Start Date and Salvage Value can no longer be changed.
For straight-line, Convention, Useful Life, and Method are locked too — with one exception: you can switch the method to Custom, which lets you hand-edit the remaining schedule.
Account changes only affect journals posted after the change.
To change the cost of an active asset, use Revalue (see Disposing, Revaluing, Cancelling, and Voiding Fixed Assets).
Questions about creating or depreciating fixed assets? Reach out through the chat bubble or at support@softledger.com — happy to help.