Managing the fixed assets in QuickBooks can be done with the help of fixed asset manager. Fixed asset manager is a feature available in QuickBooks desktop that computes depreciation of fixed assets based on the standards published by IRS. In this, the terms depreciation methods, and predefined reports in fixed asset manager are used to better manage asset information. It should be noted that FAM is only available in QuickBooks desktop premier accountant, enterprise, and enterprise accountant.
Fixed assets in accounting is referred to as property that cannot be converted into cash easily and are conventionally cannot be sold to the end users directly. The fixed assets manager lets the users to keep a close account of assets and their depreciation efficiently through an inbuilt automatic process. After setting up the fixed asset manager in QuickBooks, the user becomes eligible to use fixed asset manager in QuickBooks. This helps in calculating the reduction in the value of fixed assets by following the standards that are published by the internal revenue service. To know more about managing/using fixed assets using fixed asset manager in QuickBooks, make sure to stick to the article till the end.
Managing Fixed Assets Using Fixed Asset Manager (FAM) in QuickBooks
Important Terms to Understand
|Capitalization Limit||The dollar limit for fixed asset purchases to qualify as an asset instead of expense. It could range – as an example – from $200 to $20,000 per item purchased, depending on the size of the company.|
|Fixed Asset||Tangible items (i.e. machinery, furniture, computers, and equipment) owned by a company that have a useful life of greater than one year and whose value is greater than the company’s capitalization limit.|
|Depreciation||The decline in the price of an asset, attributable to deterioration, obsolescence, and impending retirement. Depreciation applies particularly to physical assets like equipment and structures. This loss in value needs to be tracked for tax purposes.|
|Disposal of Asset||This refers to removing an asset from the company either by theft, selling, or throwing it away.|
Types of Depreciation Methods
|Straight-Line Method (SL)||An easy method that allocates an equal amount of depreciation to each time period.|
|Declining-Balance Method (150% & 200% DB)||Allocates more depreciation expense to the early years of an asset’s life, when it is new; since there should be less down-time and fewer repairs in early years, the company should get more use out of the asset in the beginning of its life.|
|MACRS (Income Tax Method)||Uses the double-declining balance method, but you only take one-half year’s depreciation in the first year, and then you switch to the straight line method in the middle of the asset’s life, so a 5 year asset takes 6 years to depreciate.|
|ACE Adjustment Calculation||To determine the total ACE adjustment needed to compute a tax return for a corporation. Assets are grouped by category and sorted by asset number within each group.|
|Amortization Schedule by General Ledger (G/L) Account Number||To see a summary of the activity of the amortized assets. Assets are grouped by general ledger account number and sorted by asset number within each group.|
by User Defined (1 to 5)
|To see a summary of the activity of the amortized assets, grouped by one user-defined classification. Assets are grouped by the user-defined field and sorted by asset number within each group.Note: There is a report for each user-defined field that you use.|
|AMT Adjustment Calculation||To print the necessary information for AMT depreciation adjustment reporting (Federal depreciation – AMT depreciation = AMT adjustment). Assets are grouped by category and sorted by asset number within each group.|
|Asset Disposition by Asset Sales Description||To see a summary of disposition information according to the sale description assigned to each asset. Assets are grouped by asset sale description and sorted by asset number within each group.|
|Asset, Basis and Disposal Detail Report||To print the asset details for each asset in the Asset and Disposal tabs that you see on-screen.|
|Assets Acquired in the Current Year||To see a summary of each asset purchased in the current year. Assets are grouped by general ledger account number and sorted by acquisition date within each group.|
by G/L Account Number
|To see an activity summary for each asset, grouped by general ledger account number. Assets are sorted by acquisition date within each group.|
by User Defined (1 to 5)
|To see an activity summary for each asset, grouped by one user-defined category. Assets are sorted by asset number within each group.Note: There is a report for each user-defined field that you use.|
|Lead Schedule by Category||To see an activity summary for each asset, grouped by category, in a traditional lead schedule format. Assets are sorted by asset number within each group.|
|Lead Schedule by G/L Asset Account||To see an activity summary for each asset, grouped by general ledger account number, in a traditional lead schedule format. Assets are sorted by asset number within each group.|
|Lead Schedule by Location||To see an activity summary for each asset, grouped by location, in a traditional lead schedule format. Assets are sorted by asset number within each group.|
|Lead Schedule by Tax Form and Property Description||To see an activity summary for each asset, grouped by tax form and property description, in a traditional lead schedule format. Assets are sorted by asset number within each group.|
|Monthly G/L Accumulated Account Summary||To see the total monthly cost additions and deletions and their beginning and ending balances. This report is grouped by general ledger asset account. Assets without assigned account numbers are grouped by “No Account Number.”|
|Monthly G/L Asset Account Summary||To see the total monthly accumulated depreciation/amortization additions and deletions, and their beginning and ending balances. This report is grouped by General Ledger Accumulated Depreciation and Amortization account. Assets without assigned account numbers are grouped by “No Account Number.”|
|Monthly G/L Expense Account Summary||To see the total monthly depreciation/amortization expense additions and deletions, and beginning and ending accumulated depreciation and amortization balances. This report is grouped by General Ledger Depreciation and Amortization Expense account. Assets without assigned account numbers are grouped by “No Account Number.”Note: This report will appear from the list after expense data are entered.|
|Personal Property Schedule by Year of Acquisition||To see a summary of depreciation amounts for assets that you marked as personal property. Assets are grouped by the year each asset was placed in service, and sorted by acquisition date within each group.|
|Projection by Category||To see a five-year projection for each asset. Assets are grouped by category, and sorted by asset number within each group.|
|Remaining Basis Over Remaining Life Report||To identify assets that were not fully depreciated. Assets within this report are grouped and subtotaled by category.|
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Steps to assign an account to multiple assets
While converting the asset data from one version of QuickBooks desktop to another, or importing the assets into FAM, it might leave some general ledger accounts. This requires to be manually assigned in FAM.
- At first, you need to open fixed asset manager.
- And then, in the schedule tab, highlight all the assets that require to be assigned to a specific account.
- Next step is to hit a right click the selected assets and then select assign G/L accounts to assets.
- Followed by selecting the account and hitting OK button.
Changing or adding depreciation method/setting
You might require to change or add the depreciation method for a fixed asset in order for FAM to calculate the current and prior depreciation correctly.
- This can be done by opening the fixed asset manager.
- And then from the file menu select client information tab.
- Now, select the appropriate depreciation method for the depreciation basis in the methods tab.
- The next step is to select OK tab to save the changes.
Depreciate an old asset in QuickBooks
The business might already have some fixed assets even before deciding to use FAM. The steps to be followed to record the fixed assets with appropriate depreciation.
In QuickBooks desktop
- For this, select fixed asset item list from the list menu.
- And then, choose item and hit new.
- The final step is to enter necessary information and choose OK to close the new item window.
In fixed Asset manager
It is important to note that:
- In case the current date is entered in the date placed in service field, then the prior depreciation will be grayed out.
- Also, it is important to know the amount of depreciation booked in previous years before continuing. In case you do not know this information, then you can speak to the accountant for guidance.
The steps to be followed are:
- At first, click on ok tab when the asset sync log window opens.
- And then, double click the asset created in the schedule tab.
- Now move to the prior depreciation row and then choose the amount displayed.
- Also make proper changes by adjusting the AMT, ACE, Book, State, and other columns.
- The last step is to select save.
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Exporting QuickBooks fixed asset items into ProSeries form 4562
It is important to note that QuickBooks fixed asset manager can only export data to the same year of ProSeries. This is due to QuickBooks desktop is based on calendar year while fixed asset manager and ProSeries are based on tax year. This will mean that QuickBooks desktop 2017 comes with FAM 2016 which can export to Proseries 2016.
- The steps involved here is to create the file with the form that is the same as the form in QuickBooks desktop, in ProSeries.
- And then in QuickBooks desktop:
- Creating FAM asset
- For this, select fixed asset item list, from the lists menu.
- And then choose item and hit new.
- Also enter the fixed asset information and hit ok tab.
- You need to import QuickBooks FAM information into fixed asset modules.
- It is supposed to select manage fixed asset from the accountant menu. And then in QuickBooks enterprise, select company, manage fixed asset.
- After that, choose create a new fixed asset manager client and hit ok tab and hit twice.
- You are then required to enter the date and select next.
- Now select applicable basis and hit next.
- Also choose the default depreciation method for each basis and hit next.
- Once done with that, select a method of how you want the fixed asset items brought in fixed assets module from QuickBooks desktop and hit next.
- Followed by selecting the type of assets to save to the fixed asset item list in QuickBooks and then click on next.
- Also choose finish tab lastly, and hit ok in the asset synchronization log window.
- Creating FAM asset
- In the fixed asset manager
- It is supposed to select export and ProSeries tax from the file menu and click on export.
- After that select the file from export ProSeries tax client file list.
- And also select the client file and hit export.
- Last step is to select ok tab, where the message states “The export has been completed successfully”
- In ProSeries
- Keep in mind that the import should show completed when you try to open the client file.
- And all assets from QuickBooks should show in the asset list of proseries from 4562 depreciation and Amortization schedule and asset entry worksheets.
Importing fixed assets from excel into fixed asset manager
You can transfer the information from the third-party application to FAM as long as they can export the data as comma separated value file
- Open the fixed asset manager.
- And from the file menu select import.
- After that select comma separated to start the Import wizard.
- And follow the prompts and complete import.
Selecting the basis on which to post a journal entry
It should be noted that in the fixed asset manager, it is possible to change the basis, you are posting journal entries on
- You will have to open fixed asset manager.
- And from the QuickBooks menu, select post journal entry to QuickBooks.
- And then select the desired posting basis from the basis to port drop down menu.
- Followed by posting the journal entry as usual.
We conclude the article over here, with the hope that the information shared in above might be of some help in managing or using fixed assets using fixed asset manager in QuickBooks. However, in case of any query, give us a call at 1-800-761-1787. Our QuickBooks enterprise technical support experts and professionals will ensure to provide you with immediate technical assistance.