Important Accounting Dates for Fixed Assets

There are three critical dates for each individual fixed asset.  These dates establish when the asset was acquired, placed in service, and the start of depreciation.  These three dates are listed below:

  1. Acquisition Date – the date the asset was purchased.
  2. Service Date – IRS rules define when an asset is placed in service and depreciation of the asset may begin.  An asset is considered to be placed in service when it is first put into a condition or state of readiness and availability for a specifically assigned function.
  3. Depreciation Date – the date used to begin calculating depreciation.  This is usually the same as the Service Date, but can be different.  Most organizations will also use the same depreciation date for all of their schedules.  Others will sometimes use a different starting date for Tax versus Internal Financial Book.
Monthly calendar

Accounting Dates

In addition to the asset dates, there are several dates that impact the actual calculated values.  These dates can be changed to match your current, past or future accounting period or periods.

  • Tax Year – determined by the ending date for the calendar tax year.  For many organizations this will be December 31, but others will end their year in different months.
  • Current Accounting Period – determined by the beginning and ending dates of the depreciation period.  The accounting period may for one or more periods or a full year.

A very important calculation concept is the “as of” date.  When running reports, the “as of” date is the close of a particular accounting period.  This will impact the calculated values of Prior, Current, Total Depreciation and Net Book Value for each asset as explained below:

  • Prior Accumulated Depreciation – the amount of accumulated depreciation before the current accounting period.
  • Current Period Depreciation – the amount of depreciation calculated for the current accounting period.
  • Total Depreciation – the sum of prior accumulated and current period depreciation.
  • Net Book Balance – the unamortized balance through the Depreciation Period End date.  This is calculated by subtracting total depreciation from the cost basis.

There are other important dates for transfers, disposals and other asset activity that we will cover in future posts.  If you have any questions about the key dates for fixed assets or calculating depreciation, leave them in the comments or on our questions page.

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7 thoughts on “Important Accounting Dates for Fixed Assets

  1. if purchasing hardware for future use…do I need to start depreciation upon acquisition…or is it as each asset is placed into service?

  2. dGuru

    Depreciation starts as of the “service date” and for this asset your service date was 2011, not when you moved in. So, start depreciation for 27.5 years starting in 2011 using straight line with a mid-month convention.

  3. I purchased a property which was my primary residence for 22 years, I began using it as a rental in 2011. I understand that the property gets depreciated on Sched E as of the “service date” in 2011. My question is, do I depreciate it for 27.5 years starting in 2011, or do I start the depreciation at year 23 since I previously owned it for 22 years. Thanks.

  4. Generally speaking IRS regulations and GAAP define the start date for depreciation of an asset as the date it is placed in service.

  5. Can you have a book depreciation start date prior to an in-service date? What would be the reason for doing this?

  6. what is the Difference between transaction date ,inservice date and accounting date.Why is that inservice date should be prior to the transaction date?

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