Fixed Assets
A fixed asset is something the business uses for more than a year — a vehicle, a computer, machinery, furniture, a building. Instead of expensing it all at once, you spread its cost over its useful life as depreciation. Fixed Assets (sidebar or Lists → Fixed Assets) keeps a record for each asset, builds its depreciation schedule, posts depreciation to the ledger, and handles disposal. It's included on every tier.
The accounting model
| Account | Type | Holds |
|---|---|---|
| Asset account | Fixed Asset | The original cost |
| Accumulated Depreciation | Fixed Asset (contra) | Depreciation posted so far |
| Depreciation Expense | Expense | Depreciation charged each period |
Book value is cost minus accumulated depreciation. Most businesses keep one asset account and one accumulated depreciation account per class — Vehicles, Computer Equipment, Furniture — not per asset. Fixed Assets keeps the per-asset detail, so the ledger stays tidy and you still see every asset.
Registering an asset
Record the purchase as usual — for example, a Write Check for $48,000 to the Vehicles account. Then choose New Asset and enter:
- Name and optional description
- Purchase date — depreciation starts here
- Cost and Salvage value (what you expect to recover at the end; often $0)
- Useful life in months — IRS Publication 946 has guidance; 36 to 84 months covers most small-business assets
- Method — see below
- Asset account, Depreciation expense account, and Accumulated depreciation account
Book depreciation methods — choose one per asset:
- Straight Line — cost minus salvage, spread evenly. A $48,000 truck with $4,800 salvage over 60 months depreciates $720 a month. The last period absorbs rounding so the book value lands exactly on salvage.
- Declining Balance — larger amounts early, smaller later, for assets that lose value quickly. Choose Double declining (200%), 150% declining balance, or your own annual rate (up to three decimals, for example 22.375). Each period applies the rate to the current book value. Double-declining balance is twice the straight-line rate — 40% a year for a 60-month asset. It stops at salvage.
- Sum of Years — an accelerated method between the two, used where an accountant prefers it.
Tax depreciation (MACRS)
Book and tax depreciation often differ on purpose. Alongside the book schedule, each asset can carry a Federal tax schedule (MACRS, with a recovery class and placed-in-service date) and a state tax schedule. Tax schedules are for your return only — they never post to the ledger, so there's no Post button on them.
On the federal schedule you can also enter the Section 179 expense you elect for the asset, and for MACRS assets tick Elect out under Bonus depreciation if you aren't taking it (otherwise the bonus percentage for that year is applied). Export Form 4562 saves a worksheet for a tax year from the federal schedules.
The Tax Trial Balance uses these figures: section 179 (Form 4562 Part I), bonus depreciation, the book-to-tax depreciation difference, and a Form 4797 worksheet for assets you sold.
Posting depreciation
Open an asset and choose Show depreciation schedule to see every period with its amount and whether it's posted. The schedule ties to the general ledger, including when several assets share one accumulated depreciation account. Choose Post on a period to create the entry:
DR Depreciation Expense — Vehicles 720
CR Accumulated Depreciation — Vehicles 720
Periods already posted aren't posted again. Most businesses post monthly as part of the month-end close. When accumulated depreciation reaches cost minus salvage, the asset shows Fully Depreciated and stays on the Balance Sheet at its salvage value until you dispose of it.
Disposal
When you sell, scrap, or give away an asset, choose Dispose asset and enter the disposal date and any amount you received. Solid Accounting posts an entry that:
- removes the asset's accumulated depreciation (debit),
- removes its original cost (credit), and
- posts the remaining book value as a loss to the asset's depreciation expense account.
The asset is marked Disposed and keeps its full history.
Money you received isn't posted by the disposal. Record it separately — usually a Record Deposit — and have your accountant reclassify the result to a gain or loss on disposal account if you want it shown separately.
Common gotchas
Fully depreciated but still in use. Normal. It stays on the Balance Sheet at salvage (or zero) until you dispose of it.
Changing the method after depreciation is posted. Talk to your accountant first. The usual route is to dispose of the asset and register it again with the new method and remaining life.
Book life doesn't match the tax life. Fine. Choose the book life that reflects how long you'll really use the asset; the MACRS schedule handles the tax side.