From an economic or accounting point of view, when we refer to fixed assets we speak of those elements of the company’s assets that intervene in the productive cycle, but do not disappear with it, in contrast to the elements that are called circulating, which disappear with the manufacturing and sales cycle of our product (or our service).
In short, they are elements whose usefulness usually extends for more than a year. They are both conceptually and accountably part of the company’s assets. We distinguish between tangible fixed assets (machinery, furniture, computer equipment), intangible (patents, transfer rights, intellectual property, administrative concessions …) and real estate.
The particularity of its behavior at the level of income and expenses is that we do not discount the purchase price at the time of acquisition, but each year we depreciate or amortise a percentage of it, which will depend on the type of asset that is. Depreciation is the accounting reflection of the deterioration or loss of value suffered by our asset over time, either due to the loss of efficiency of the asset derived from its use or because it is obsolete due to technological advances.
Therefore, the depreciation percentage also determines the useful life of the asset. At the end of said useful life, the asset is derecognized, either because it has no more use or because it is sold to a third party, usually for its residual value, which is what is called “disposal of assets”.
In theory, the amount of the depreciation can be any that we can justify that reflects the loss of value of our asset, but normally the administration of finance gives us fixed percentages that it is convenient to use to save work and problems with public finances.
Regardless of the accounting issue, it is desirable to have a database external to the accounting, which includes the price and date of purchase, the percentages of depreciation and the accumulated depreciation of each item in each year, etc. to have an individualized control of each one.
Fixed assets managed from Reviso
Reviso has an asset module which, when you post the purchase invoice for a fixed asset item, it is automatically registered in that module, in order to be able to track our asset outside the balance sheet.
In addition, the asset module within Reviso allows to automate the depreciation accounting entry, configuring the accounting accounts in which we want it to be carried out, as well as the sales entry or deregistration settlement.