Fixed Assets

Fixed assets are long-term tangible assets that a business owns and uses to produce goods and services. These assets cannot be quickly converted into cash. Instead, they serve the business in the long run by generating profitable revenue. Some examples of fixed assets include buildings, machinery, vehicles, and furniture. Products that you sell in your business are not considered fixed assets.

Zoho Books now allows you to record fixed assets and automatically calculate depreciation for them. You can sell or write off the asset when it is likely to generate a profit, after it has completed its useful life, or when it has been fully depreciated. Learn more about depreciation calculation for a fixed asset in Zoho Books.

Note: This feature is available only in early access. To enable it, contact our support at support@zohobooks.com.

Enable Fixed Assets for your Organization

To start recording fixed assets in your organization, you must first enable it in Preferences. Here’s how:

Go to Settings.
Select General under Preferences.
Check the option Fixed Assets.
Scroll down to the bottom of the page and click Save.

Once you’ve enabled the Fixed Assets, you can start creating fixed assets for your organization.

Create Fixed Asset Type

If you have multiple fixed assets that belong to the same category or follow a similar depreciation pattern, you can create a fixed asset type and associate the fixed assets with the respective type.

You can create a fixed asset type in two places:

Fixed Asset Type Creation Pop-up

To create a fixed asset type:

Go to Accountant on the left sidebar and select Fixed Assets.
Click Manage Asset Types in the top right of the page.
In the next page, click + New Fixed Asset Type in the top right corner.
Enter the required fixed asset type details.

Fields	Description
Fixed Asset Type Name	Enter the name of the fixed asset type.
Depreciation Method	Select the depreciation method for your asset. Straight Line Depreciation: The asset’s value is evenly depreciated until the end of the asset’s life. Declining Balance Depreciation: The asset’s value depreciates rapidly during the initial stage of its useful life slowly in the later stage. In this method, depreciation is calculated each year by applying a constant percentage to the asset’s current value.
Depreciation Percentage	Enter the percentage at which the asset should be depreciated every year. Note: This field appears only when you have selected the Depreciation Method as Declining Balance Method.
Depreciation Frequency	Select the frequency of depreciation. Monthly: Depreciation is calculated on a monthly basis. Yearly: Depreciation is calculated on a yearly basis.
Computation Type	Select the type of computation you want to apply and track the asset’s depreciation. Pro Rata: Depreciation is calculated based on the exact number of days the asset is used. Non Pro Rata: Depreciation is calculated based on the average number of months or years the asset is used.
Asset Life	Enter the asset life in months.
Depreciation Account	Select the account to track the asset’s depreciation over time.
Expense Account	Select the account to track the expenses associated with the asset’s depreciation.

Click Save.

Fixed Asset Creation Page

You can also create a fixed asset type on the fixed asset Creation page. Here’s how:

Go to Accountant on the left sidebar and select Fixed Assets.
Click + New Fixed Asset in the top right corner of the page.
In the New Fixed Asset page, click + New Asset Type in the Fixed Asset Type dropdown.
In the pop-up that appears, enter the required details and click Save.

The fixed asset type is now created and associated with the new fixed asset. You can provide the other required details and proceed to save the fixed asset in your Zoho Books organization.

Other Actions for Fixed Asset Types

You can perform various actions on the fixed asset types you create in Zoho Books:

Edit Fixed Asset Types

To edit a fixed asset type:

Go to Accountant on the left sidebar and select Fixed Assets.
Click Manage Asset Types in the top right corner.
Click the down arrow next to the asset type and select Edit from the dropdown.
In the Edit Fixed Asset Type pop-up, make the necessary changes.
Click Save.

Delete Fixed Asset Types

To delete a fixed asset type:

Go to Accountant on the left sidebar and select Fixed Assets.
Click Manage Asset Types in the top right corner.
Click the down arrow next to the asset type and and select Delete from the dropdown.
In the pop-up that appears, click Delete to confirm.

Note: The fixed asset type cannot be deleted if it is associated with any fixed asset. To delete the fixed asset type, first delete the fixed asset associated with it.

Create Fixed Assets

To create a fixed asset:

Go to Accountant on the left sidebar and select Fixed Assets.
Click + New Fixed Asset in the top right corner of the page.
Enter the required details.

Fields	Description
Name	Enter the name of the fixed asset.
Fixed Asset #	The fixed asset number will be auto-populated. You can also click the Gear icon to enter the fixed asset number manually.
Disposal Value	Enter the remaining amount of the asset after its useful life or the value after it’s fully depreciated.
Purchase Date	Select the date on which the asset was purchased.
Purchase Price	Enter the price at which you purchased the asset.
Current Value	Enter the current price of the fixed asset. Note: The current value is the price at which depreciation begins for the fixed asset.
Fixed Asset Type	If you have multiple fixed assets that belong to the same category or follow a similar depreciation pattern, you can create a fixed asset type and associate the fixed assets with the respective type. Note: If you’e already created a fixed asset type, the respective depreciation and account details of the fixed asset will be auto-populated. You can also change these details if required.
Warranty Expires On	Select the warranty expiration date for the asset.
Fixed Asset Account	Select the account to track the fixed asset.
Notes	Provide notes for the fixed asset you create for internal use.
Reporting Tag	Associate reporting tags to the fixed assets you create.
Serial Number	Enter the serial number for the fixed asset for internal use.

Click Save as Draft.

The fixed asset is now created in Draft status, and you can view it in the Draft Assets tab of the Fixed Assets module. Journals for the acquisition or depreciation of the fixed asset will not be recorded until it is marked as Active.

Create Fixed Assets from Bills

You can create fixed assets from bills by associating the bill’s line item to a fixed asset account.

If you want to record fixed assets in a different account, create a new account in the Chart of Accounts module and set the Account Type as Fixed Asset. To do this:

Go to Accountant on the left sidebar and select Chart of Accounts.
Click + New Account in the top right corner.
In the Create Account pop-up, select the Account Type as Fixed Asset and enter the Account Name.
Check the option When this account is associated with a line item in a transaction, create the item as a fixed asset.
Select the Fixed Asset Type you want to associate with the account.
Click Save.

Once you’ve created an account, you will have to create a bill. To do this:

Go to Purchases on the left sidebar and select Bills.
Click + New in the top right corner.
Enter the required details. In the Item Table, ensure that the account associated with the line item is a fixed asset account that you created.
Click Save as Open.

Once you’ve saved the bill, the line item will be created as a fixed asset, and you can view it in the Draft Asset tab of the Fixed Assets module.

Note: Fixed assets can only be created for a line item of a bill that is in Open status.

Other Actions

You can perform various actions on the fixed assets in your Zoho Books organization:

Edit Fixed Assets

To edit a fixed asset:

Go to Accountant on the left sidebar and select Fixed Assets.
In the Draft Asset tab, select the fixed asset you want to edit.
Click Edit at the top of the fixed asset’s Details page.
Make the necessary changes and click Save as Draft.

Note: You will only be able to edit the assets that are in Draft status. Once you mark a fixed asset as active, you will not be able to edit it.

Delete Fixed Assets

To delete a fixed asset:

Go to Accountant on the left sidebar and select Fixed Assets.
In the Draft Asset tab, select the fixed asset you want to delete.
Click Delete at the top of the fixed asset’s Details page.
In the pop-up that appears, click Delete to confirm.

Note: You can only delete the assets that are marked as Draft and Canceled. Once you mark a fixed asset as active, you will not be able to delete it.

Mark as Active

When you create a fixed asset, it will be saved in Draft status by default. To start calculating depreciation for the fixed asset, you can mark it as active, and Zoho Books automatically starts calculating the depreciation value based on the preferences you’ve set. Journal entries for the asset’s depreciation will be automatically created from the start date to the current date. You can view these journals under the Depreciation History section of the Depreciation tab.

To mark a fixed asset as active:

Go to Accountant on the left sidebar and select Fixed Assets.
Select the fixed asset on the Draft Asset tab that you want to mark as active.
Click Mark as Active at the top of the fixed asset’s Details page.
In the pop-up that appears, click Yes to confirm.

The fixed asset will now be moved from the Draft Asset tab to the Asset Register tab.

View Depreciation Flowchart

The depreciation flowchart shows the depreciation of an asset over time. The x-axis represents the depreciation date based on the depreciation frequency you’ve set, while the y-axis represents the asset’s current value.

To view the depreciation flowchart:

Go to Accountant on the left sidebar and select Fixed Assets.
Select the fixed asset for which you want to view the depreciation flowchart.
Navigate to the Depreciation tab on the fixed asset’s Details page.

The depreciation flowchart will be displayed.

View Depreciation History

When you mark a fixed asset as active, the asset’s depreciation rates calculated from the start date till the current date will be displayed in this section.

To view the associated journal entries:

Go to Accountant on the left sidebar and select Fixed Assets.
In the Asset Register tab, select the fixed asset for which you want to view the journal entries.
Go to the Depreciation tab on the fixed asset’s Details page.
Under Depreciation History, click View Journal next to any depreciation date to view the journal details.

View Depreciation Forecast

View Depreciation Forecast Zoho Books also forecasts the asset’s depreciation rates based on its useful life and other depreciation configurations like the Disposal Value provided when creating the fixed asset. This provides an overview of how the depreciation rates for the fixed assets will be calculated for the upcoming months or years.

To view the depreciation forecast:

Go to Accountant on the left sidebar and select Fixed Assets.
In the Asset Register tab, select the fixed asset for which you want to view the journal entries.
Go to the Depreciation tab in the fixed asset’s Details page.
Scroll down and click Depreciation Forecast.

You can now view the forecasted depreciation rate for the fixed asset you created.

Write Off Fixed Assets

When a fixed asset can no longer be used in your business, you can write it off. Once a fixed asset is written off, depreciation entries after the write-off date will be deleted, while the depreciation entries up to the write-off date will remain available under Depreciation History.

To write off a fixed asset:

Go to Accountant on the left sidebar and select Fixed Assets.
Under the Asset Register tab, select the fixed asset that you want to write off.
Click Write Off at the top of the fixed asset’s Details page.
In the pop-up that appears, enter the required details.

Fields	Description
Expense Account	Select an account to track the expenses associated with the written-off fixed asset.
Write Off Date	Select the date on which you want to write off the fixed asset. The amount for which the asset is written off will be displayed below this field.
Reason	Enter the reason to write off the fixed asset.

Click Write Off.

The fixed asset’s status will be changed to Written Off.

Cancel Fixed Assets

If you want to remove the depreciation rates and journals recorded for your fixed assets, you can cancel them. Here’s how

Go to Accountant on the left sidebar and select Fixed Assets.
Under the Asset Register tab, select the fixed asset you want to cancel.
Click the More icon at the top of the fixed asset’s Details page and select Cancel from the dropdown.
In the pop-up that appears, click Yes to confirm.

The fixed asset will be marked as Canceled. If you later want to start calculating depreciation for the canceled fixed asset, convert it to Draft status and mark it Active again.

Note: You can delete the fixed assets that are marked as Canceled.

Sell Fixed Assets

Prerequisite: To sell a fixed asset, you have to create an invoice with a line item associated with the fixed asset account.

When the asset it no longer required or it is likely to generate profit, you can sell the fixed asset from your Zoho Books organization.

To do this:

Go to Accountant on the left sidebar and select Fixed Assets.
Under the Asset Register tab, select the fixed asset that you want to sell.
Click the More icon at the top of the fixed asset’s Details page and select Sell from the dropdown.
In the pop-up that appears, enter the required details.

Fields	Description
Invoice	Select the invoice associated with selling the fixed asset.
Line Item	Select the fixed asset as a line item in the invoice.
Gain/Loss Account	Select an account to track the gain or loss associated with selling the fixed asset.
Sell Date	The date on which you are selling your fixed asset will be auto-populated. The price at which the asset is sold will be displayed with the gain or loss amount below this field. The gain or loss amount is the difference between the asset’s actual sale value and the cost of the asset at the date of sale. Note: The sell date will be fetched from the invoice created for selling the asset.
Reason	Enter a reason for selling your fixed asset.

Click Sell.

The fixed asset’s status will be changed to Sold.

View Reports

You can view reports for the fixed assets recorded in your Zoho Books organization in the Reports module. To do so:

Go to Reports on the left sidebar.
Select Fixed Asset Register under Accountant.

The list of fixed assets recorded in your organization will be displayed.

The different sections that the report contains are as follows:

Report Sections	Description
Name	The name of the fixed asset.
Status	It displays whether the asset is in the Active, Fully Depreciated, Written Off, or Sold status within the selected date range.
Fixed Asset Type	It displays the fixed asset type of the fixed asset.
Purchase Date	It displays the purchase date of the asset.
Purchase Value	It displays the price at which the fixed asset was bought.
Current Asset Value	It displays the current price of the fixed asset.
Opening Asset Value	It displays the price of the asset at the beginning of the selected date range.
Depreciation Value	It displays the price at which the fixed asset is depreciated in the selected date range.
Closing Asset Value	It displays the price of the asset at the end of the selected date range.
Acquisition Value	It displays the acquisition price of the asset in the selected date range.
Write Off Value	It displays the price at which the fixed asset was written off.
Sale Value	It displays the price at which the asset is sold.

To customize the report:

In the Fixed Assets Report page, click the Customize Report icon in the top right corner of the page.
In the Customize Report page, enter the required details.

Fields	Description
Date Range	Select the start date and end date to generate the report.
Group By	Select Fixed Asset Type in the Group By dropdown.
Status	Select the status to generate the report. The available statuses are: All, Active, Write Off, Sold, and Fully Depreciated.

Click Run Report.

The report will be generated based on the preferences you’ve set.

You can also choose the columns you want to display in the report and hide the other columns. To do this:

In the Customize Report page, click Show/Hide Columns in the left pane.
Click the Add icon near the respective sections under Available Columns to be displayed in the report.
Click Run Report.

The report contains amounts for the depreciation, acquisition, write-off, and sale of the fixed assets. You can click on a fixed asset to view the respective drill down summary.

This report summary contains the following sections:

Fields	Description
Valuation Date	This section displays the date on which the asset was valuated.
Type	It displays the type of valuation that is associated with the fixed asset. The valuation types are: Depreciation, Acquisition, Write Off, and Sale.
Current Value	It displays the value of the fixed asset after valuation.
Net Asset Value Change	It displays the difference in the asset value after a valuation for various types, such as Depreciation, Acquisition, and more.
Accumulated Depreciation	It displays the total amount of depreciation expense accumulated since the asset was marked as active.

To customize this report:

Click the Customize Report icon in the top right corner.
In the Customize Report page, enter the required details:

Fields	Description
Date Range	Select the start date and end date for which you want to generate the report.
Valuation Type	Select the valuation type of the report. The available types are: All, Depreciation, Acquisition, Write Off, and Sale.

Click Run Report.

The report will be generated based on the preferences you’ve set.

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