Fixed Asset Depreciation
by Demas Simeng
(Tabubil, Papua New Guinea)
I have bought some furniture and mini bus for our small church. As far as accounting is concerned these are classified as fixed assets.
1. How do I record this in the books of accounts?
2. What method depreciation can be best used?
3. Can I include depreciation as an expense and accumulated depreciation as an fixed asset in the book of accounts?
Please help me outstanding more on this.
Looking forward to hear from you.Vickey's Reply
Determine first if your church is required to track depreciation See this post on church depreciation
If you determine you need to track depreciation, then follow the steps below:
1. It would be recorded under your church’s fixed asset account.
2. There are several methods of depreciating an asset; however, the simplest and most commonly used is straight line depreciation
. See this page for simple instructions on using this method.
3. Accumulated Depreciation
is a long-term contra asset account
(an asset account with a credit balance) that is reported on the balance sheet.
4. During each accounting period (year, quarter, month, etc.) a portion of the cost of fixed assets is used up. The portion used up is reported as Depreciation Expense
on the income statement.