Fixed Asset Manager (FAM) is a program that is only available with QuickBooks Desktop Premier Accountant, QuickBooks Desktop Enterprise Solutions and QuickBooks Desktop Enterprise Solutions Accountant. It is an application that calculates depreciation of fixed assets based on the standard published by IRS.
This article covers the recommended set up of Fixed Asset Manager along with other information that will aid you to maximize the use of this application.
Intuit articles have limited information about depreciation methods. For detailed discussion, visit the IRS publication 946.
Use this Report
For this Purpose
Fixed Asset Manager (FAM) is an integrated application designed to work if QuickBooks Desktop is in single user mode and FAM files is stored in the local drive. Because of this, the program will not allow you to open your FAM file if it is saved over the network.
The workaround described in this section can easily create the possibility for errors if it is not followed EVERYTIME FAM is used.
To place FAM files on the server and access them across the LAN:
This process will create multiple copies of FAM file in everyone’s PC including the server. You must be diligent in keeping track of the latest changes and backup version in order to prevent any error or missing information in the future.
QuickBooks and Fixed Asset manager (FAM) have different data files. It is best to set up your QuickBooks Desktop Company File properly to make sure that QB FAM calculates and function correctly.
If you are just starting to create your QuickBooks Desktop company file, you can set up your Income Tax Form by following this steps:
Or if you already have an existing QuickBooks Desktop data file, you can edit this information by following the steps bellow:
This step is important and necessary for FAM to track asset depreciation to an appropriate tax line, assuming that FAM user intends to export this financial data to tax software, like ProSeries. In addition to the asset account, QB FAM posts depreciation to the depreciation expense account and an offsetting entry to the accumulated depreciation account. It is necessary to have some specific General Journal (G/L) account created prior to using FAM for the first time.
Depends on your or your accountant’s preference, you can either do a minimalist’s approach in tracking your assets by using limited number of accounts but it is strongly recommended by QuickBooks Desktop to follow the ideal set up.
Minimal Account in the Chart of Accounts (CoA) Prior to using QB FAM
Ideal Account Setup in Chart of Accounts (CoA)
For QuickBooks Premier Accountant and QuickBooks Enterprise Accountant, choose Manage Fixed Asset from the Accountant menu (For QuickBooks Enterprise Solutions, Choose Manage Fix Assets from the Company menu).
The Fixed Asset Manager Client Wizard
The steps described in this section is only applicable if you did not set up your fixed asset accounts in QuickBooks Desktop or you prefer to transfer the information from FAM to QuickBooks Desktop rather than transferring the information from QuickBooks Desktop to FAM.
Information from your QuickBooks Desktop company file will automatically go to your FAM the first time that you set it up. The two application will continue to sync depending on the sync set up that you choose on your FAM. Check Asset Synchronization to check your synchronization set up.
QuickBooks Desktop and Fixed Asset Manager have separate data files. However, the two programs have the ability to sync information with each other using either automatic or manual sync.
QuickBooks Desktop to Fixed Asset Manager
Fixed Asset Manager to QuickBooks Desktop
There are times when a business needs to track the disposal of an asset. Typically, it is due to sales or loss of the property. To dispose the asset, you have to record the disposal both in QuickBooks and FAM based on what happened to the asset.
FAM Basis Disposition Information Section
The journal entry that you need to record on your QuickBooks will depend on the category of the disposed item.
Fix Asset sold for Gain
If you sell the equipment for more than its book value, you will realize a gain. A gain is similar to a revenue; record it with a credit entry.
Example: Fixed asset is sold on March 30th for 9,000.00
Your Journal Entry includes the original purchase price, the accumulated depreciation, the cash received and the gain. Note that gain is in the Credit Column.
Book Value is the difference between the Cost of fixed asset and the fixed asset's Accumulated Depreciation while Gain is the difference of Selling Price and Book Value.
Fixed Asset sold for a Loss
If sell the equipment for less than its book value, you will realize a loss. A loss is similar to an expense; record it with a debit entry.
Example: Fixed asset is sold on March 30 for $ 7,500.00.
Your Journal Entry includes the original purchase price, the accumulated depreciation, the cash received and the loss: Note that the loss is in the Debit column.
Book Value is the difference between the Cost of fixed asset and the fixed asset's Accumulated Depreciation. The difference between Selling Price and Book Value is the Loss since it has a negative value.
Fix Asset sold for a Wash (Breakeven)
If you sell the equipment for its book value, the sale is a wash, i.e., you realize neither a loss nor a gain.
Example: Fixed asset was sold on March 30 for $8 725.00
Your Journal Entry includes the original purchase price, the accumulated depreciation, and the cash received. It includes neither a gain nor a loss. You simply remove the Fixed Asset and the Accumulated Depreciation from your books.
Book Value is the difference between the Cost of fixed asset and the fixed asset's Accumulated Depreciation. Since the difference between Selling Price and Book Value is zero, this transaction is considered a wash or break even.
Complete abandonment of an asset resulting in a sales price of 0.00
Fixed Asset Junked there will be loss equal to its book value. This is called abandonment. The item is usually just thrown in the trash, or hauled to the dump. Sometimes a company will have to have the item hauled away
Example: Fixed asset was junked on March 2.
Your Journal Entry includes the original purchase price, the accumulated depreciation, and any expenses incurred.
There are two concern with disposed assets
It is a must to create a backup copy of your FAM file and print or at least save a PDF copy of the reports before preparing your Fixed Asset Manager for next year because after preparing the file for the new year, you can no longer make modifications or create reports for prior year information
After filing your tax returns and secure a backup copy of your FAM file, you are now ready to prepare your asset's for next year's depreciation calculations.
This procedure will do the following:
Fixed Asset Manager (FAM) Support Articles