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How to I account for Depreciation in LedgerSMB?

Wed, 04/25/2007 - 12:24 — agittins

LedgerSMB does not have a built-in assett tracking / depreciation feature. Depreciation can be managed manually using General Ledger Transactions. You should probably confirm this with your accountant, but the basic procedure (kindly suggested by Tony Fraser) is, assuming a computer asset over 5 years:

Set up 3 accounts:

  • An asset account such as "Computers"
  • An asset account such as "Accumulated Amortization, Computers" that is normally a negative balance therefor it is a contra account
  • An expense account such as "Computer Depreciation"

Upon purchasing a depreciable asset (in this case, a computer):

Account Debit Credit Notes
On purchasing the computer
Computers 1000.00
Bank Account 1000.00
End of Year 1
Computer Depreciation 400.00 (40% of $1000)
Accumulated Amortization, Computers 400.00
End of Year 2
Computer Depreciation 240.00 (40% of $600)
Accumulated Amortization, Computers 240.00
End of Year 3
Computer Depreciation 144.00 (40% of $360)
Accumulated Amortization, Computers 144.00
Disposal
Bank Account 75.00 (sale of computer)
Accumulated Amortization, Computers 784.00 (reversing entry)
Computer Depreciation 141.00 (residual value)
Computers 1000.00 (reversing entry)

Comments

Sat, 01/03/2009 - 12:19 — ferary

Pretty nice site, wants to

Pretty nice site, wants to see much more on it! :)

Tue, 12/09/2008 - 23:59 — Chris Travers

Interest is not automated

Interest is not automated yet. Ledger balances are handled automatically via the Reports/Chart of Accounts screen.

Best Wishes,
Chris Travers
Core contributor

Tue, 12/09/2008 - 18:33 — kings

I am very new to ledger

I am very new to ledger balance..really i dont know how to calculate ledger accounts..
how to calculate interest??