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How to I account for Depreciation in LedgerSMB?
Wed, 04/25/2007 - 12:24 — agittins
LedgerSMB does not have a built-in assett tracking / depreciation feature. Depreciation can be managed manually using General Ledger Transactions. You should probably confirm this with your accountant, but the basic procedure (kindly suggested by Tony Fraser) is, assuming a computer asset over 5 years:
Set up 3 accounts:
- An asset account such as "Computers"
- An asset account such as "Accumulated Amortization, Computers" that is normally a negative balance therefor it is a contra account
- An expense account such as "Computer Depreciation"
Upon purchasing a depreciable asset (in this case, a computer):
| Account | Debit | Credit | Notes |
|---|---|---|---|
| On purchasing the computer | |||
| Computers | 1000.00 | ||
| Bank Account | 1000.00 | ||
| End of Year 1 | |||
| Computer Depreciation | 400.00 | (40% of $1000) | |
| Accumulated Amortization, Computers | 400.00 | ||
| End of Year 2 | |||
| Computer Depreciation | 240.00 | (40% of $600) | |
| Accumulated Amortization, Computers | 240.00 | ||
| End of Year 3 | |||
| Computer Depreciation | 144.00 | (40% of $360) | |
| Accumulated Amortization, Computers | 144.00 | ||
| Disposal | |||
| Bank Account | 75.00 | (sale of computer) | |
| Accumulated Amortization, Computers | 784.00 | (reversing entry) | |
| Computer Depreciation | 141.00 | (residual value) | |
| Computers | 1000.00 | (reversing entry) | |
Comments
Degree Online
Degree Online
hi thanks for
hi thanks for works..:
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mirc
That's very true. A lot of
That's very true. A lot of companies, especially small businesses, forget to record all of this detailed and important information. Assets need to be recorded like this in detail to keep an accurate measurement of the true value of the business and its current assets.
Kelly
Really well managed accounts
Really well managed accounts and its clarify all the depreciation accounts and all the other accounts year wise.Its a really well managed post.Thanks for sharing the information.
Setting up the Chart of Accounts
Please resolve an argument between me and my husband - he's at risk of having to set up his sodding accounts system himself!
Is it vital to the system in the future that the dropdown menus 'Receivables', 'Payables', 'Tracking' and 'Non-tracking' are assigned prior to commencing any AR or AP data entry, or can you sort this out later when you've decided how you want to do your reporting?
Sorry if I asked something covered already, I did have a look first...
i am also still confused how
i am also still confused how to handle ledgersmb account.please help me out.
Interest is not automated
Interest is not automated yet. Ledger balances are handled automatically via the Reports/Chart of Accounts screen.
Best Wishes,
Chris Travers
Core contributor
I am very new to ledger
I am very new to ledger balance..really i dont know how to calculate ledger accounts..
how to calculate interest??