What Is the Best Method of Tracking Fixed Assets
There are basically two types of fixed assets: tangible assets and intangible assets.
Tangible fixed assets include land, construction, equipment, furniture and fixtures, signage and computer equipment.
Intangible fixed assets include intellectual property rights, phone numbers, websites, and even the name of the business you registered or registered.
Fixed assets on the balance sheet are displayed as summary accounts, but for depreciation, valuation and tax purposes, what is the method of tracking fixed assets?
First track the fixed assets and see the screenshot on the right (
Click zoom in).
We see that in the Balance Sheet Summary account, each account only shows the total amount of all assets in any given category: the account name/amount summary accounting on the balance sheet is actually important to include the contents of these summary summaries, and the method of tracking the fixed assets used can help you understand the schedule more deeply, to find out what these aggregated numbers represent.
The scheduling process is in financial accounting and fixed assets are accounted for in the controlled plan account.
Being controlled in the plan simply means that the fixed assets are assigned a control number that tracks changes in the assets, any new purchases, sales or depreciation.
Using the account list above, let\'s take a look at what the fixed asset schedule for mechanical equipment account 261 will look like (
You can also click on the screenshot to enlarge)
: Mechanical equipment schedule-Acct 261 date/start balance/control #/end balance if we look at the fixed assets schedule for the account #261-mechanical equipment, we can see the details and activities of any given month or period.
The control number you see in the screenshot on the right does not essentially have to be a number, usually a short description of the asset, followed by the date of purchase.
The invoice can also be used as a control number.
By looking at the mechanical equipment schedule for this month, you can see what the aggregate total amount of this account on the balance sheet includes.
Within 5 months, a frame machine was purchased, the part washers depreciated, and an alignment machine was purchased.
Why tracking is important when considering the best way to track fixed assets, it is better to take advantage of controlled plan accounts that, if printed or viewed, can not only go through personal accounts, review can also be carried out within the scope of the plan.
Without the details of fixed assets, it is almost impossible to know what equipment or other fixed assets you have by tracking, especially if you deposit them into a bulk account, and it cannot be determined by publishing the cost of fixed assets or depreciation of assets.
When paying taxes, you can bet that your CPA or tax professional will want your controlled schedule to be printed out to see the activities for the whole year.
If you do not apply your own depreciation, accounting can use the details contained in these schedules to determine the correct Depreciation type based on fixed assets.
Read my article fixed asset types: Examples and definitions for more information on fixed assets.
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