Depreciate fixed assets

Each unit's depreciation rules are kept on its policy, but in this release depreciation is not posted for you: post it yourself with a journal voucher at each period end.

Accounting Fixed assets
4 min read
Updated October 20, 2026

For Accountant

On this page

What is kept for each unit
How much to depreciate
Post depreciation with a journal voucher
Common questions

What is kept for each unit

Each unit on Fixed assets policy has the rules that decide its depreciation (Set up fixed assets and read the register):

Rule	Meaning
Depreciation method	The method chosen from the list kept in the system
Book value	The unit's cost from the purchase
Salvage value	What the unit is expected to be worth at the end of its life
Assets life (In year)	The years over which it is depreciated
Depreciation start after days	Days from the stock-in date to the first depreciation
Depreciation recurring days	Days between depreciations

The first depreciation falls on the stock-in date plus the Depreciation start after days (365 when it is 0).

How much to depreciate

The amount of one year is (Book value minus Salvage value) divided by Assets life. For a machine bought for 120,000 with a salvage value of 20,000 and a life of 5 years, a year's depreciation is (120,000 minus 20,000) divided by 5, which is 20,000. Check the amount against what your accountant or auditor expects; the screens do not show a depreciation schedule.

Post depreciation with a journal voucher

Do this at each period end (usually at the year end, before you close the year: Year-end checklist).

Work out the amount
Who
Accountant
What changes
One amount for each unit, as above, or the total for each asset ledger.
Open a journal voucher
Who
Accountant
Where
Journal voucher > Add (Make adjustments with a journal voucher)
What changes
The form opens with today's date; set the date to the period end.
Debit the expense, credit the accumulated depreciation
What changes
Line 1: the Depreciation ledger from Configuration > Fixed assets as Debit, with the total amount. Line 2: the asset's Accumulated depreciation ledger as Credit, with the same amount. Add a Narration such as "Depreciation for the year, delivery van".
Needs
Debits equal credits.
Save
What changes
"Journal voucher (number) saved successfully." The year's profit falls by the amount; the asset's net value on the balance sheet falls by the same amount.

What depreciation changes

Area	Change
Profit and loss	The Depreciation expense ledger is debited
Balance sheet	The Accumulated depreciation ledger is credited, so net asset value falls
The unit's policy	Nothing: the policy only holds the rules

Worked example: the machine over its whole life, and two assets on one journal

The machine above has a Book value of 120,000, a Salvage value of 20,000 and an Assets life (In year) of 5, so you post 20,000 at each year end:

Year	Depreciation posted	Accumulated depreciation afterwards	Net value on the balance sheet
1	20,000	20,000	100,000
2	20,000	40,000	80,000
3	20,000	60,000	60,000
4	20,000	80,000	40,000
5	20,000	100,000	20,000

The machine's Fixed assets ledger shows the cost of 120,000 all along; the net value is that cost less its Accumulated depreciation. After year 5 the net value has come down to the salvage value and nothing is left to depreciate.

The company also has a delivery van with a book value of 1,000,000, a salvage value of 250,000 and a life of 5 years: (1,000,000 − 250,000) ÷ 5 = 150,000 a year. One journal voucher at the year end can carry both:

Line	General ledger	Debit	Credit
1	Depreciation (from Configuration > Fixed assets)	170,000
2	The machine's accumulated depreciation ledger		20,000
3	The van's accumulated depreciation ledger		150,000

Common questions

Where is the depreciation schedule?

There is none. Use the formula above, or ask your accountant. The ledger reports show what has been posted (Check the books with trial balance and ledger reports).

I changed the depreciation method on a unit and the amounts did not change.

The method is kept as a record. The amount depends on the book value, salvage value and life, not on the method.

A unit was sold or returned. Does it keep depreciating?

A unit that is sold, returned or disposed of should not be depreciated. Leave it out of your journal.