Asset Items & Depreciation

How to Setup BOS Enterprise to Calculate Depreciation

ℹ️ This tutorial summarises the steps to take. Each step is explained in detail below.

1. Add the applicable asset accounts to the Chart of Accounts. 

2. Create an Asset Class (Items).

3. Create Categories for the Asset Class (Items).

4. Create an Item (Asset).

   1. Enter Asset Information on the Assets (tab).

   2. Identify the Accumulated Depreciation account on the Accounting (tab).

5. Create a Transaction Type and set User Access to the transaction type.

6. Add the setting: Accounting > Transaction Type - Depreciation and select the transaction type created under Step 5 (e.g. Depreciation Journal).

7. Add the transaction type to a Menu.

8. Restart BOS Enterprise.

9. Enter the depreciation transaction.

10. Check that there is only one depreciation entry per asset per month.

Step 1 How to Create Asset Accounts on the Chart of Accounts

1. Navigate to the Chart of Accounts (e.g. Main Menu > Setup > Accounting > Accounts(tab)).

2. Click Add Account (button).

3. Add three accounts for every asset type to the category Fixed Assets or Non-Current Assets as follows:

   1. Name of Asset NBV (e.g. Furniture & Fittings NBV). 

      • Note: NBV stands for Net Book Value and is the main/parent account. 

   2. Name of Asset @ Cost (e.g. Furniture & Fittings @ Cost).

      • Note: When you purchase the asset, or enter the asset's opening balance, the purchase price is posted to this account.

   3. Name of Asset Acc Depr. (e.g. Furniture & Fittings Acc Depr).

      • Note: Acc Depr stands for Accumulated Depreciation. This account reflects the amount by which the asset has been depreciated.

4. Right click the @ Cost account and next to Nest Under and select the NBV account.

5. Right click the Acc Depr account and next to Nest Under and select the NBV account.

6. Click Save (button) unless it is greyed out (which indicates all changes are saved).

7. Click Rebuild (button).

Step 2 How to Create an Asset Class for Items

1. Navigate to Items (e.g. Main Menu > Items > Items).

2. Click Menu (button) > Edit Classes.

3. Click New (button).

4. Name = Type a name (e.g. Assets).

5. Data Type = Select Assets from the dropdown list.

6. Click Save (button) unless it is greyed out (which indicates all the changes are saved).

   • Note: The other fields on the Class form can be completed but are unnecessary for the purposes of capturing depreciation. See Item Classes for instructions on the other fields.

Step 3 How to Create a Category for the Asset Class

1. Navigate to Items (e.g. Main Menu > Items > Items).

2. Click New (button).

3. Name = Type a name for the category (e.g. Assets).

4. Class = Select the class you created in Step 2 (e.g. Assets).

5. Click Save (button) unless it is greyed out. 

6. Right click the category and click Set Default Tabs. 

   1. Click the Accounting tab.

   2. Click a blank space on the category tab to close the popup or press escape and continue with Step 7.

7. Right click the category and click Enable Fields.

   1. Click the fields you want to enable (e.g. Make and Model, Reference, Entities).

   2. Click a blank space on the category tab to close the popup.

8. Click Save (button) unless it is greyed out. 

9. Create subcategories (optional).

10. Close the categories popup (click the X in the corner).

Step 4 How to Create an Asset Item

ℹ️ The cost price of the asset is not recorded when entered here. If you entered opening balances, the cost price and accumulated depreciation would have been entered then. If you recently purchased the asset, it would have been entered through a Bank Payment, Supplier Invoice, or Journal Entry (e.g. it the asset was financed).

1. Navigate to Items (e.g. Main Menu > Items > Items).

2. If the display does not show Items click Menu (button) > Default.

3. Next to Categories, select Assets (or the name of the Class you created in Step 2).

4. Click New (button).

5. Complete the header details as follows:

   1. Description = Type the name of the asset (e.g. Contractors Saw 254mm).

   2. Code = Type an abbreviation for the asset (e.g. Contr. Saw).

   3. Make = Type the asset's make.

   4. Model = Type the asset's model.

      1. • Note: You can create lookup lists for the make and model. See Item Customisation for more information.

   5. Subcategory = Select a subcategory from the dropdown list if you created subcategories.

   6. Reference = Type additional information (e.g. Production, Warehouse).

6. Click Assets (tab) and complete the information as follows:

   1.  Asset Type = Select one of these options from the dropdown list:

      1. • Machine

         • Equipment

         • Furniture & Fittings

         • Vehicles

         • Land & Buildings

   2. Department = Select a department from the dropdown list.

   3. Serial No. = Type the asset's serial or other identifying number.

   4. Sizes & Weight = Enter the size and weight of the asset (optional).

   5. Dates > Manufactured = Select the date on which the asset was manufactured.

   6. Dates > Purchased = Select the date on which the asset was purchased.

   7. Meter Data > Enabled = Check the checkbox if you want to record meter data (e.g. odometer readings on vehicles or copy numbers on printers / photocopiers). Click Save (button) after checking the checkbox to show additional features.

   8. Purchase Detail > Date = If the date was entered under the dates section it is auto filled. Else select the purchase date on the calendar.

   9. Purchase Detail > Value = Type the cost price of the asset.

   10. Depreciation (Straight Line):

       1. Starting Date = Enter the starting date for the depreciation (e.g. the purchase date), or the first day of the financial year if the asset was purchased before you started using BOS Enterprise.

       2. Starting Value = Enter the cost price if the asset was purchased after you started using QuickEasy BOS. Else enter the asset's Net Book Value at the start of the financial year.

       3. Residual Value = Enter the residual value at the end of the asset. This residual value can be zero if the asset is scrapped at the end of its useful life.  Enter R1 (or $1) if it is not scrapped. The R1 value is an accounting convention and keeps the asset alive on the financial statements. 

       4. Months = Enter the number of months that the asset is expected to last or enter the number of months over which the tax authorities permit the asset to be written off.

       5. Click Save (button) to calculate the monthly depreciation.

7. Click Accounting (tab)

   1. Click Refresh (button) on the top of the screen to refresh the accounts lookup lists if you are following all the steps in one go.

   2. Click Add Accounting (button).

   3. Category = Select Non-Current or Fixed Assets.

   4. Account = Select the asset's accumulated depreciation (Acc Depr) account.

   5. Click Save (button).

Step 5: How to Create a Transaction Type

1. Navigate to Transaction Types (e.g. Main Menu > Setup > Transactions > Transaction Types (tab)).

2. Click New (button).

3. Complete the following information on the right:

   1. General

      1. Description = Depreciation Journal

      2. Code = DEPR

      3. Disable Field = Click Header - Company and Header - Credit Terms.

   2. Items & Inventory

      1. Item Type = Items

      2. Pricing = Cost Price

      3. Resolve = None Selected

   3. Estimating: No changes

   4. Accounting

      1. Accounting checkbox = Checked

      2. Currencies = Local only

      3. VAT Control = Blank

      4. VAT Type (Default) = No VAT

      5. VAT = Blank

      6. Dr Category = Expenses

      7. Dr Account = Depreciation

      8. Cr Category = Non-current / Fixed Assets

      9. Cr Account = Blank

4. Accept the defaults for all the other fields.

5. Click Save (button) if not greyed out.

6. Click Rebuild (button) if it changes colour.

7. Right click the transaction type you just created and click View/Edit User Access.

8. Click Edit (button).

9. Allocate access as follows to yourself:

   1. View = All

   2. New = Checked

   3. Edit = Checked

   4. Delete = Checked

10. Click Save (button).

11. To allocate access to additional users:

    1. Click Actions (button) > Add/Remove Users.

    2. Move the users from the Available to the Selected section.

    3. Click OK (button).

    4. Edit their rights as needed starting with View options.

    5. Click Save (button).

Step 6: Activate the General Setting

1. Navigate to Settings (e.g. Main Menu > Setup > Settings > General (tab).

2. Type depr in the search block.

3. If nothing shows up, click Add/Update (button).

   1. Click the setting: Accounting > Transaction Type - Depreciation.

   2. Click Add/Update (button).

   3. Click Close (button).

4. Next to the setting Accounting > Transaction Type - Depreciation click the value column and select the Depreciation Journal you created in Step 5 from the dropdown list of transaction types.

5. Click Save (button).

Step 7: Add the Transaction Type to a Menu

ℹ️ The transaction type must be added to a menu because it requires actions to process the depreciation that are unavailable to transactions that are accessed through the ledger interface. 

1. Navigate to Menus (e.g. Main Menu > Setup > Menus).

2. Double click Accounting under Menu Groups (or any other Menu group you prefer).

3. Click Edit (button).

4. Click Add Menu Items (button).

5. Scroll down to the newly created transaction type (e.g. Depreciation Journal).

6. Click Add (button).

7. Click Close (button).

8. Check or uncheck the checkbox under Tile Menu as you prefer.

9. Check or uncheck the checkbox under Begin Group if you want a line to be drawn before the entry.

10. Click Save (button).

11. Click Close (button).

12. Under Menu Templates, right click your template or the Default Template and click Preview (optional if you are continuing with Step 8). 

Step 8 Restart BOS

1. Click Home (button) > Restart on the main menu.

Step 9 Create the Depreciation Journal

⚠️Currently, BOS Enterprise does not check if depreciation has already been entered for the month. Use Step 10 to verify that there is only one entry per asset. If there is more than one entry, delete the duplicate entries (items) from the journal entries.

ℹ️ Depreciation Journal in this context is the Transaction Type that was created under Step 7.

When an asset is fully depreciated, it is set to inactive and depreciation is no longer captured. This process is automated.

1. Navigate to the Depreciation Journal (e.g. Main Menu > Accounting > Depreciation Journal).

2. Click New (button).

3. Enter the information as follows:

   1. Date = Accept today's date or change the date as needed.

   2. Reference = Type February Depreciation where February represents the current month.

   3. Click Actions (button) > Add Depreciable Assets.

   4. A popup requests permission to remove existing items and add depreciable assets. Click Yes (button).

   5. The depreciation entries are added.

4. Change the transaction's Status to Complete.

5. Click Save (button).

Step 10 Verify

1. Navigate to the ledger (e.g. Main Menu > Accounting > Ledger).

2. Filter = Ledger Account.

3. Account = Depreciation - Expenses.

4. Date = This month.

5. Click View (button).

6. Check that the depreciation was entered correctly, if not, edit the transaction and make any changes.

   • Note: If you run this process more than once in a month, depreciation will be duplicated. Cancel the other transactions for the same month or delete the duplicate items.

7. Navigate to Items List View (e.g. Main Menu > Items > Items).

8. Click Menu (button) > Assets.

9. The asset values, depreciation, and net book values are displayed.