Managing Fixed Assets

Prosaic’s Fixed Assets register tracks assets from purchase through depreciation and disposal. It keeps each asset’s book value, associated journals and history together, so you can review both the register and its accounting entries from one place.

If you’re setting up Fixed Assets for the first time, start with the Fixed Assets Quick Start Guide. This article covers the individual fields, depreciation workflow, corrections and lifecycle rules in more detail.

In this article

• Asset lifecycle, methods and fields
• Adding and activating assets
• Editing an active asset
• Running and rolling back depreciation
• Using the register, bulk actions and exports
• Disposing of and deleting assets

Before you start: set up asset types

Every fixed asset needs an asset type. The type supplies the default depreciation settings and the accounts Prosaic uses for purchase, depreciation and disposal journals.

You can create workspace asset types for reuse across entities that share your chart templates, or create a type for one entity. Read Setting Up Asset Types for account requirements, workspace behaviour and rules for editing types that are already in use.

Asset lifecycle, methods and fields

Asset lifecycle

Each asset moves through three visible states:

1. Draft: the asset can be edited freely and has no accounting effect.
2. Active: the asset can be depreciated, rolled back, edited, disposed of or deleted. Changing its cost or depreciation settings reverses any depreciation already posted, so Prosaic asks you to confirm first. See Editing an active asset.
3. Disposed: the asset has been sold or written off and has a disposal journal. The asset can’t be edited or deleted. If you sold it through a bank reconciliation, unreconciling that transaction returns it to Active.

Depreciation methods

• Straight Line: applies the same depreciation amount each month until the asset reaches its residual value.
• Diminishing Value: uses the remaining depreciable value at the start of each financial year. The monthly amount is consistent within that financial year and reduces in later years.
• No depreciation: keeps the asset in the register without calculating depreciation. These assets are skipped when you run depreciation in bulk.

For Straight Line and Diminishing Value, calculate depreciation using either a Depreciation Rate or a Useful Life. Enter one, not both.

Important asset fields

• Purchase Date records when the asset was acquired. Start Date controls the first month available for depreciation.
• Purchase Price is the asset’s historical cost. Cost Limit optionally caps the amount used for depreciation without changing that historical cost.
• Residual Value is the floor that depreciation won’t reduce the asset below.
• Opening Accumulated Depreciation records depreciation from before the asset entered Prosaic. It appears when the depreciation start date is later than the purchase date.
• Business Use Percentage splits depreciation between the depreciation expense and private-use accounts. A private-use account must be configured on the asset type before you can enter less than 100%.

Immediate expense claim

For a depreciable asset, the Immediate Expense Claim field offers 0% or 20%. If you select 20%, Prosaic posts the immediate-expense journal when the asset is activated and depreciates the remaining cost base.

The 20% option can be used for New Zealand’s Investment Boost. Eligibility depends on the asset and when it became available for use, so check IRD’s Investment Boost requirements before claiming it.

Adding and activating assets

Three ways to add assets

Manual entry: go to Fixed Assets and click Create fixed asset. Select the entity and asset type, enter the purchase details, then review the inherited depreciation settings.

Bank reconciliation: when you reconcile a purchase to a fixed asset account, Prosaic creates a draft asset using the transaction’s date, amount and description. If the account has a matching asset type, that type is selected automatically. The source transaction remains linked from the asset page. To skip the draft and add the asset as active straight away, register it from the transaction instead.

CSV import: click Import to upload a Xero fixed asset register or use Prosaic’s CSV template. Imports create drafts for one entity, with up to 1,000 assets per file. Review the result for skipped rows or warnings before activating anything.

Registering an asset from a bank transaction

1. Go to Transactions and open the payment’s details.
2. Choose Register asset from the ⋯ menu beside Edit. You can also select the payment and choose it from the actions menu.
3. Check the details. The name comes from the merchant or description, and the start date from the payment. If you’ve coded the payment to a fixed asset account, that account’s asset type is chosen. You can change:
   • Asset type: sets the accounts, and the depreciation method and rate.
   • Start date and Business use. Business use below 100% needs an asset type with a private-use account.
   • GST on the purchase: GST on expenses if the entity is GST registered, otherwise no GST.
   • Method and Rate (or useful life).
4. Check the summary on the right: the cost excluding GST, the GST claimed, depreciation for a month and for the rest of this financial year, and the book value at year end.
5. Click Reconcile and register.

One journal reconciles the payment and records the purchase, and the asset is added to the register as Active, ready for its next depreciation run. Its cost is the payment excluding GST.

[SCREENSHOT: the Register asset dialog for a payment, showing the form on the left and the cost, depreciation and journal summary on the right]

If the payment already has an asset (for example, you reconciled it before and then unreconciled it), the dialog says so. A draft is activated with the new details; an active asset stays, and a second one is added.

Reviewing a draft

Draft assets don’t affect the ledger. You can change their entity, asset type, dates, values and depreciation settings until they’re ready.

For several drafts, select them in the register and use Bulk actions → Edit. Bulk editing can update the asset type, depreciation method, rate, useful life or immediate-expense percentage. Each enabled field is applied only to the selected drafts.

Activating an asset

Activation posts the asset’s immediate-expense journal (if it has a claim) and makes a depreciable asset eligible for depreciation. You can activate one asset from its Actions menu or activate several valid drafts through Bulk actions → Activate.

For a manually entered purchase that isn’t already in the ledger, turn on Create Purchase Journal before activation. Prosaic posts the purchase journal and links it to the asset. If the asset came from a reconciled bank transaction, or its opening balances were imported separately, don’t create another purchase journal.

Editing an active asset

Open the asset and click Edit. Make your changes, then click Save, or Cancel to discard them. The Actions menu is hidden until you save or cancel.

Changes to the name, asset number, description, dimensions or purchase date save straight away, because they don’t change any posted amounts.

Changes to the purchase price, cost limit, residual value, opening accumulated depreciation, immediate expense claim, depreciation method, rate, useful life, start date, asset type or business use percentage are treated as corrections. Correcting the business use percentage here re-splits every depreciation run and the immediate expense claim between the depreciation expense and private-use accounts. If the asset’s use changed partway through its life, see Changing business use instead. If nothing has been posted for the asset yet, they save straight away too. If depreciation has been run, or the change affects the immediate-expense journal, Prosaic shows you what will change before it saves anything:

• Every depreciation run for the asset is reversed. The original journals stay visible as reversed.
• The immediate-expense journal is edited to match the new values, or voided if you change the claim to 0%. If you add a claim, a new immediate-expense journal is posted.
• Re-run depreciation is ticked by default. It reposts depreciation up to the last month that had been run, using the new values. Untick it if you’d rather run depreciation yourself later.
• If any of these entries fall in a prior financial year, you need to acknowledge that previously reported figures may change.

Click Update asset to confirm.

[SCREENSHOT: the Update asset confirmation dialog on an active asset with depreciation runs and an immediate-expense claim, showing the list of changes and the Re-run depreciation checkbox]

Changing business use

Business use often changes during an asset’s life, for example when a vehicle is used less for the business. Open the asset and find Business use. It lists the business use from the depreciation start month, then each month it changed.

• Change business use records a new percentage from a month onwards. The month defaults to the next month to depreciate, so the usual routine is to run depreciation up to the last month at the old percentage, change business use, then run the next month. Earlier months keep the percentage they were posted at. If you pick a month that has already been depreciated, Prosaic reverses depreciation from that month and shows you what will change first.
• Correct fixes a percentage that was entered wrong. Depreciation from that period’s first month is reversed and re-posted at the corrected percentage. Correcting the first period also updates the immediate expense claim.
• Remove deletes a change entered by mistake, and the earlier percentage carries on.

Once business use has changed during an asset’s life, the Business Use Percentage field under Edit is locked, so a single percentage can’t overwrite the history. Correcting another value, such as the useful life, keeps each month’s business use.

[SCREENSHOT: the Business use section on an active asset with two periods, and the Change business use dialog]

What stays locked

• Entity: to move an asset to another entity, delete it and recreate it there.
• Purchase Price and asset type, when the cost came from a reconciled bank transaction or a purchase journal. These follow the transaction or journal they came from. Updating the asset automatically when that source changes is coming soon. Until then, use the 💬 button in Prosaic and we’ll update the asset for you.

Running and rolling back depreciation

Running depreciation

You can run depreciation for one active asset from its Actions menu, or select several active assets and choose Bulk actions → Run depreciation.

1. For the first run, choose the From month. It defaults to the asset’s depreciation start month.
2. Choose the month to run Up to and including. Available months run through the current calendar month.
3. Review the assets included, then click Run Depreciation.

Prosaic processes every unrecorded month in the range, including months across financial-year boundaries. Each monthly journal is dated on the last day of that month and posted automatically. Later runs continue from the month after the most recent run.

The register and asset page then show the updated accumulated depreciation, current book value and Depreciated Until month. Depreciation stops when the asset reaches its residual value.

Rolling back depreciation

To correct a depreciation run, open the active asset and choose Actions → Rollback depreciation. You can also use Rollback beside a posted depreciation journal.

1. Select the earliest month you want to reverse.
2. Review the range shown. Prosaic reverses the selected month and every later depreciation run for that asset.
3. If the rollback reaches a prior financial year, acknowledge the reporting warning.
4. Click Rollback.

The original journals remain visible as reversed, the book value is restored, and the rollback is recorded in the asset’s history. You can then rerun depreciation for the required months. If the asset’s cost or depreciation settings are wrong, edit the asset instead. Prosaic reverses and re-runs its depreciation for you.

Using the register, bulk actions and exports

The Fixed Assets register works across the workspace. Use search plus the entity, status and asset-type filters to narrow the view. You can sort the columns, choose which columns are visible and retain useful views while working through a client.

Select rows to use the available bulk actions:

• Edit or Activate selected drafts.
• Run depreciation for selected active, depreciable assets.
• Delete selected draft or active assets.

The Export menu downloads the current register view as CSV, PDF or Excel. Search and entity, status and asset-type filters are included in the export, making it useful for client workpapers and review.

Open an asset to see its current book value, accumulated depreciation and latest depreciation month. The Journals section links to purchase, immediate-expense, depreciation and disposal journals. The History section records creation, updates, activation, depreciation, rollback, disposal and deletion activity.

Disposing of and deleting assets

Disposing of an asset

Use disposal when an active asset is sold, scrapped or written off. There are two ways to do it:

• The sale money landed in a bank account: reconcile that deposit as the sale, starting from the deposit or from the asset. One journal reconciles the bank transaction and disposes of the asset, so the sale isn’t counted twice.
• There’s no bank deposit (the asset was scrapped, traded in, used to pay off a loan, or taken by the owner): dispose of it from the asset.

Recording a sale from a bank transaction

1. Go to Transactions and open the deposit’s details.
2. Choose Record asset sale from the ⋯ menu beside Edit. You can also select the deposit and choose it from the actions menu.
3. Choose the asset you sold. If you’ve coded the deposit to a fixed asset account, that account’s assets are listed first.
4. Review the journal. The disposal date and sale price come from the deposit and can’t be changed. You can change:
   • The GST on the sale, in the deposit line’s tax rate: GST on income if the entity is GST registered, otherwise no GST. The deposit line shows the proceeds excluding GST.
   • The account for each gain or loss. Prosaic uses the accounts from the entity’s last disposal, or the standard accounts the first time.
   • Reverse depreciation runs after the disposal date: ticked by default. Untick it to keep those runs.
5. Click Reconcile and dispose.

One journal reconciles the deposit and disposes of the asset, so the sale isn’t counted twice. It credits the sale (including any GST) to the asset account, takes the rest of the asset’s cost off, clears its accumulated depreciation and records the gain or loss. Where the sale price is more than the original cost, it splits the gain into depreciation recovery (taxable) and capital gain (non-taxable).

[SCREENSHOT: the Record Asset Sale dialog with an asset chosen, showing the sale price, bank and date, the journal lines with the deposit line’s tax rate, the journal lines and the reverse-depreciation checkbox]

You can also start from the asset: choose Actions → Dispose, click Link bank deposit and choose the deposit. Deposits since the asset’s start date are listed, newest first; search to find older ones. The dialog then works the same way.

[SCREENSHOT: the Dispose dialog with a bank deposit linked]

Disposing of an asset without a bank deposit

1. Open the asset and choose Actions → Dispose.
2. Enter the disposal proceeds and disposal date.
3. Review the generated journal lines, accounts and tax rates. Choose the account the proceeds went to, such as the loan or owner drawings account. You can edit the journal or add a balancing line where needed.
4. If depreciation has been run for months after the disposal date, Reverse depreciation runs after the disposal date is ticked. Untick it to keep them.
5. Click Dispose Asset.

Prosaic calculates the gain or loss using the asset’s book value at the disposal date and posts the disposal journal. Where proceeds exceed original cost, the form splits the gain into depreciation recovery and capital gain lines for review. The disposal month’s own depreciation run is always kept.

[SCREENSHOT: recapture the Dispose dialog with the reverse-depreciation checkbox showing]

Reversing a disposal

If a disposal made from the asset has the wrong date, proceeds or accounts, reverse it and dispose of the asset again.

1. Open the disposed asset and choose Actions → Reverse disposal.
2. Click Reverse disposal to confirm.

Prosaic voids the disposal journal and returns the asset to Active. Any depreciation runs the disposal reversed stay reversed, so run depreciation again to catch up. If the disposal is in a prior financial year, reversing it changes that year’s figures.

A sale recorded from a bank deposit can’t be reversed this way. Unreconcile the bank transaction instead.

[SCREENSHOT: the Reverse disposal confirmation]

Deleting an asset

Draft assets can be deleted without an accounting impact.

Active assets can also be deleted. Prosaic reverses associated purchase, immediate-expense and depreciation journals, removes the depreciation runs and removes the asset from the register. A source bank transaction is not changed.

If an active asset may contain prior-year depreciation, Prosaic shows an additional reporting warning that you must acknowledge. Deletion can affect previously reported figures and can’t be undone.

Disposed assets can’t be deleted. Their disposal journal and history remain part of the audit trail. To delete one, reverse its disposal first.

Need help?

If an asset’s register value doesn’t agree with the ledger, check its purchase, immediate-expense, depreciation and disposal journals first. For a migrated asset, also confirm that the opening journal and Opening Accumulated Depreciation represent the same conversion date.

Use the 💬 button in Prosaic or email help@prosaic.works if you need help tracing the difference.