Overview
Fixed assets are created from bills — mark a bill line as a Fixed Asset line and the system capitalizes the cost and creates a draft asset for you. 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 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:
Total Amount — the line amount × quantity
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.
Step 2: Configure the asset (draft → active)
Edit the draft asset — from the asset detail page or straight from the bill — and 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) — must be on or after the source bill's posting date
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
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 (Total Amount − Salvage Value).
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: The source 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.
Questions about creating or depreciating fixed assets? Reach out through the chat bubble or at support@softledger.com — happy to help.