Most businesses require equipment—sometimes very expensive
equipment—to run. Vehicles, computers, office machines, manufacturing
equipment, buildings, all require a substantial investment. Tracking the book
value of such long-term assets over time is important; the amount by
which they depreciate
can affect the worth of your business and the size of your tax
You must work with your accountant to make sure you're
recording all the necessary information about your assets so both financial
statements and tax returns are correct.
You have the following options for recording depreciation:
If your accountant uses the QuickBooks Fixed Asset Manager
you can create fixed
asset items to track your assets. Fixed asset items give you one
location to store information about an asset such as date of purchase, purchase
price, where you bought it, when and for how much you sell the asset, and so
on. Your accountant can use the information from the fixed asset item to figure all your depreciation and post a general journal entry back to
your company file.
In addition, your accountant can create new fixed asset items for you and
add them to your company file.
If your accountant doesn't use the QuickBooks Fixed Asset
Manager you can still use fixed asset items to track information about
your assets, such as date of purchase, purchase price, where you bought it,
when and for how much you sell the asset, and so on.
If you have several fixed assets that you're tracking using only
accounts and you
don't need the additional information in QuickBooks, there is no need to
Tracking fixed assets and
the Fixed Asset Manager
a fixed asset item