Fixed assets in ElevateBooks represent tangible properties owned by your business, including buildings, machinery, furniture, vehicles, and equipment. To be classified as a fixed asset, a property must meet specific criteria:

1. Useful Life: It should have a useful life longer than one major accounting period (typically one year).
2. Cost Threshold: The cost should exceed the capitalization threshold set by company policy or local law.
3. Productive Use: It must be held for productive use rather than immediate sale (excluding inventory).

Depreciation and Economic Life:

• The acquisition cost of a fixed asset is recovered over its economic life through depreciation.
• Depreciation spreads the cost over multiple accounting periods instead of being expensed in a single period.

Enabling the Fixed Assets Tab: Before entering transactions related to fixed assets, ensure the Fixed Assets tab is enabled in ElevateBooks:

1. Click on “Customize” below the left navigation pane.
2. Check the box for “Fixed Assets.”
3. Click “Update” below the list.

Automatically Activated Accounts: Once the Fixed Assets tab is enabled, ElevateBooks automatically activates four accounts in your chart of accounts:

1. Fixed Assets, at Cost: Records the acquisition cost of all fixed assets.
2. Fixed Assets, Accumulated Depreciation: A contra asset account summarizing depreciation to date of all fixed assets.
3. Fixed Assets – Depreciation: Records current depreciation expenses.
4. Fixed Assets – Loss on Disposal: An expense account recording loss (or gain) on the disposal of fixed assets.

Note:

• While the Fixed Assets tab is enabled, these accounts cannot be disabled.
• You can rename these accounts under “Settings” > “Chart of Accounts” to better suit your terminology.

Conclusion: Effectively managing fixed assets is crucial for financial accuracy. ElevateBooks simplifies this process by providing dedicated features and accounts. Enabling the Fixed Assets tab allows you to seamlessly track and manage your fixed assets’ acquisition, depreciation, and disposal.

For any further assistance or customization, don’t hesitate to explore the settings and chart of accounts in ElevateBooks or reach out to our support team. ElevateBooks is designed to enhance your business’s financial management.