Fixed Assets¶

Overview¶

Fixed assets track capitalizable property costs—buildings, CapEx, loan fees, lease commissions, and similar items—and recognize depreciation or amortization expense over each asset’s useful life. Credence stores the asset record, links it to the property and ledger accounts that should receive the entries, and posts period depreciation as approved ledger bundles.

Use Fixed Assets to create and maintain the asset register, and Post Fixed Assets to run depreciation for a selected accounting period across your property selection.

Definitions¶

• Fixed asset: A capitalizable cost tied to a property, with a cost basis, useful life, depreciation method, and ledger accounts for expense and accumulated depreciation.
• In-service date: The date the asset was placed into service. Depreciation timing starts from this date (see conventions below).
• Useful life: The number of months over which Credence spreads depreciable cost. Allowed range is 1 to 1,000 months.
• Salvage value: Estimated residual value at the end of useful life. Defaults to zero. Depreciable cost is asset cost minus salvage value.
• Previously depreciated amount: Depreciation already recognized outside Credence (or before the asset was tracked here). Credence adds this to ledger totals so it does not repost the same expense.
• Expense account: The income-statement account debited when depreciation is posted.
• Contra-asset account: The balance-sheet account credited for accumulated depreciation (or amortization).
• Founding ledger entries: Optional existing asset-account ledger lines linked to the fixed asset when it is created or edited. These document the original capitalization; they are separate from the depreciation bundles Credence posts later.
• Accounting period: The month (YYYY-MM) you select when posting depreciation.

Asset types¶

Depreciation methods¶

Rules and Behavior¶

Creating and editing assets¶

Creating or editing a fixed asset is a two-step workflow:

1. Optional founding entries — Select debit ledger entries on Fixed-timeframe asset accounts for properties in your selection. Entries already tied to another fixed asset are not available. When you select entries on create, Credence can prefill asset cost (sum of the selected debits), property, in-service date (from the first selected entry’s posting date), and notes (from that bundle’s description). You can change those values before saving.
2. Asset details — Enter name, asset type, cost, depreciation method, in-service date, useful life in months, optional salvage value, optional previously depreciated amount, notes, property, expense account, and contra-asset account.

Assets are scoped to properties you can access. The manage list respects the property selector and supports filtering by type, name, cost, in-service date, useful life, depreciation method, and property, plus download of the current register view.

Viewing an asset¶

The asset detail view shows founding ledger entries (if any), prior depreciation bundles, schedule amounts for the current month, and ledger accumulated depreciation including any previously depreciated amount.

Deleting an asset¶

You can delete a fixed asset only when it has no depreciation bundles on the books (including reversed bundles). Once depreciation has been posted for the asset, Credence blocks deletion.

Posting depreciation¶

On Post Fixed Assets:

1. Select an accounting period (Credence offers a window around the current month).
2. Credence lists eligible assets for the selected properties and period.
3. Review the proposed expense amount for each asset, including whether that period was already posted.
4. Select assets and post. Each successful post creates an approved ledger bundle for that period.

Eligibility for a period requires all of the following:

• The asset’s property is in the current property selection
• Sold properties are excluded from the posting run
• The in-service date is on or before the last day of the selected period
• The selected period still falls within the asset’s useful life (in-service date plus useful life months reaches at least the period end)

Already posted: Each asset can have only one depreciation bundle per accounting period. If that period already has a non-reversed bundle, Credence skips posting again for that asset.

Over-depreciation protection: Credence blocks a post when the amount already recognized plus the proposed expense would exceed depreciable cost (asset cost − salvage value).

Posted bundles debit the expense account and credit the contra-asset account for the same amount, with a description that identifies the asset and period. Bundles are tied to the fixed asset and origin as fixed-asset depreciation.

Calculation Details¶

Depreciable cost¶

Depreciable cost = Asset cost − Salvage value

Monthly amounts are rounded to the cent (half-up). Any leftover pennies are placed in the final period of the schedule so total depreciation equals depreciable cost.

Amount posted for a selected period¶

When you post for a period, Credence does not always post only that month’s schedule amount. It posts the catch-up amount still needed through the selected period:

Amount to post = max(0, Expected depreciation through selected period − Amount already recognized)

Where amount already recognized is:

• The sum of depreciation already posted in Credence for the asset (excluding reversal bundles), plus
• Any Previously depreciated amount entered on the asset

Expected depreciation through the selected period is the sum of the schedule amounts for every month from the in-service month through the selected period (using the asset’s depreciation method).

That means the first post after creating an asset (or after a gap) can include multiple months of catch-up in a single period’s bundle. Later posts for later periods only expense what has not already been recognized.

Straightline – Full Month¶

For each month index n counted from the in-service month (n = 0 is the in-service month):

• Before in-service month: $0
• Months 0 through useful life − 2: round(depreciable cost ÷ useful life months)
• Final month (n = useful life − 1): depreciable cost − (monthly amount × (useful life − 1)) so the schedule totals exactly
• After useful life: $0

Day of month on the in-service date does not reduce the first month; the full monthly amount applies in the in-service month.

Example: Cost $10,001, salvage $0, 12-month life, in service November 2021.

Straightline – Mid Month¶

Credence treats mid-month timing as starting mid-month in the in-service month. Relative to that start:

• Before the in-service month: $0
• In-service month: half of the rounded monthly amount
• Following months within useful life: full monthly amount
• One final period after the full months: the remainder that finishes depreciable cost (after the first half-month and the full months)
• After that: $0

Example: Cost $10,001, salvage $0, 12-month life, in service 11 Nov 2021.

Previously depreciated amount¶

Enter Previously depreciated amount when depreciation was already booked outside Credence and those entries will not appear in Credence. That amount counts toward accumulated depreciation on the asset and reduces future catch-up posts so Credence does not expense the same cost twice.

Common Scenarios¶

Capitalize CapEx from existing books¶

A roof replacement was already posted to a fixed asset account. When adding the fixed asset, select those founding debit entries so cost, property, and in-service date start from the capitalization, then confirm useful life, method, expense account, and contra-asset account before saving.

First depreciation run after go-live¶

An HVAC unit went into service three months ago and has no Credence depreciation yet. Posting the current period posts catch-up for all months from in-service through the selected period in one bundle, then later monthly runs post only the incremental amount still due.

Asset partially depreciated before Credence¶

Tenant improvement amortization of $24,000 over 48 months already has $6,000 recognized in a prior system. Set previously depreciated amount to $6,000. Credence treats that $6,000 as already taken when calculating how much remains to post.

Monthly close¶

Each month, open Post Fixed Assets for the close period, confirm proposed amounts and that nothing is marked already posted, select the assets to expense, and post. Sold properties in the selector are excluded from the run.

Correcting a wrong post¶

Reversal of a depreciation bundle is handled through bookkeeping (the same as other ledger bundles). After a reversal, Credence no longer counts that period’s expense toward accumulated depreciation for catch-up, but the asset still cannot be deleted if any depreciation bundle—including a reversed one—exists for it.