Fixed Assets

Fixed assets/depreciable property (1) is both tangible and intangible property used for business or held for the production of income; (2) has a determinable useful life exceeding one year; and (3) wears out, decays, becomes obsolete or loses value from natural causes.

Fixed assets/depreciable property include such tangible property as land, buildings, furniture, fixtures, office equipment, computers, and motor vehicles.  Intangible property would include goodwill, patent, franchise or trademark.

The administration and management of fixed assets can be a very complex process. As assets are acquired they need to be entered into software where they can be tracked and depreciated over their useful life. Reports and exports can then be generated to answer any fixed asset or depreciation questions.

There are 5 levels in the chart below to show the flow of processing, from top to bottom they are:

  1. Documents and import files
  2. Input processing
  3. Core fixed asset software
  4. Output processing
  5. Reports and export files

Click on any of the boxes in the chart below to learn more about that specific topic:

Image Map

Questions? Comments? Let us know in the comments section below.

More information about Bassets eDepreciation software can be found at Bassets.net or depre123.com. At Bassets register for our live webinar, download a free evaluation copy and get a personalized pricing estimate. At depre123 try out our Free Depreciation Calculator and check out our cloud based fixed assets application.

24 thoughts on “Fixed Assets

  1. dGuru

    Hello Biljana,
    The acquisition value is the amount on the invoice. The service/depreciation start date is when the asset is doing the job it was intended to do. So, when it is producing the main product for which it was purchased.

  2. dGuru

    Hello Bathabile,
    According to IRS Regulations, property is considered placed in service when it is in a condition or state of readiness and available for a specially assigned function. So, the date it was available.

  3. We have a machine on the AUC account. The acceptance test is not commenced and also we have’nt receive the last impl.invoice from the vendor. The machine started production,in test phase for simple products but still is not producing the main product for which it is purchased. Should we start depreciation and which amount should be the accuisition value?

  4. Do We start calculating depreciation on the date wer it was available for use o on the date it was put into service

  5. dGuru

    Hi Harry,
    We don’t quite have the full story in order to give you a definitive answer. When did you purchase the truck and was it purchased as a business asset? Or, was the truck previously used in the business and now has a new engine? If this is the case, depreciate the cost of the engine over the 5 year useful life of “A” truck using MACRS. If you would like to give us further details we would be happy to give more details.

  6. how would I calculate remaining useful life on a 1996 truck in good condition that has a 1 year old engine with 282 miles on it?

  7. dGuru

    Hello Suraj,
    I would place the asset “in service” in the current tax year. The prior accumulated depreciation that should have been taken in the prior tax years would then be “expensed” in the current tax year. Then starting in the “current tax year” depreciate the asset over its remaining life.

  8. How to calculate useful life of asset if asset taken in between any year for ex. Asset taken on 10.10.2009 and its useful life is 15 years and its 5 years are lost in that case what should be taken its remaining useful life? if we take remaining useful life as 10 years then 6 months ie(march-oct) how to treat that or can it be taken remaining useful life in 9.5 years

  9. dGuru

    Hello mbulu philip,
    The “in-service” date is key! This is when depreciation starts. Therefore, start depreciation in 2013.

  10. a hotel was to start operation in 2010 but started operation in 2013. Generating set and lift service were acquired in 2010. should the company commence depreciation in 2010 or 2013

  11. dGuru

    Hello Bong Oh,
    Goodwill is a Section 197 intangible if it is acquired in connection with the purchase of a trade of business that can be amortized. Goodwill that is the result of the tax payer’s own efforts (self-created goodwill) is not amortizable under code section 197.

  12. Goodwill was placed in 2004, but I didn’t start the amortization for that. Can I start it from 2014 to reduce the taxable income ?

  13. dGuru

    Hello Steve,
    Under US federal tax law, an idle asset must continue to be depreciated. Under US GAAP, we have customers that will stop or continue to depreciate idle asset. It would appear that to depreciate or not is controlled on a company by company basis as detailed in the company’s written accounting policies.

  14. Under IFRS, can depreciation be interrupted during idle time for a repair of a major piece of equipment?

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