Ledgr/Documentation/Fixed assets

Fixed assets

The things you bought that last more than a year — the bakkie, the laptops, the shop fit. Ledgr keeps the register, charges depreciation every month, and works out the gain or loss when you sell one.

Plan.

Fixed assets is included from Business upwards, with reports. See pricing — it sits there because a fixed asset register is only useful next to a balance sheet, and the balance sheet is a Business feature.

Why this is not just an expense

A R40 000 laptop put through as an expense makes one month look terrible and the next three years look better than they are. Capitalising it spreads the cost over the period you actually use it, which is both what IFRS for SMEs requires and what SARS expects to see on the ITR14. It also means the asset appears on your balance sheet, which matters the first time a bank or a landlord asks for one.

Asset classes and write-off periods

Pick a class when you capture the asset and Ledgr fills in the write-off period from SARS' Binding General Ruling 7 — the periods an SA business is actually allowed to claim, so a default schedule is one your accountant will recognise.

Every figure is a default, not a rule. BGR7 itself is a default, and a particular asset may genuinely have a different useful life — so all of it is overridable per asset.
Class	Written off over	Default method
Computer equipment	3 years	Straight line
Computer software	2 years	Straight line
Office equipment	5 years	Straight line
Furniture & fittings	6 years	Straight line
Motor vehicles	4 years	Reducing balance
Leasehold improvements	Over the lease term — 5 years unless you change it	Straight line
Land & buildings	Not depreciated	—

Land and buildings are deliberately not depreciated.

Land does not wear out, and buildings attract section 13 allowances rather than wear-and-tear. Ledgr holds them in the register so they are on your balance sheet, and charges nothing against them. The section 13 claim is a matter for your accountant at year end.

Each class names the pair of accounts its cost and its accumulated depreciation land in, which is what lets the balance sheet show them netted against each other.

Capturing an asset

Reports → Fixed Asset Register → Add asset
Describe it and pick its class
Serial numbers and locations are worth filling in. The register is what an insurance claim or an audit is answered from.
Cost and the date you brought it into use
Depreciation runs from the date it was available for use, not the date on the invoice.
Residual value, if you expect one
What you think it will still be worth at the end. Leave it at zero if you do not expect to recover anything — that is the normal case for computers.
Confirm the method and the life
Both are pre-filled from the class. Change them if this asset is genuinely different.

The two methods

Straight line — cost less residual, divided evenly over the months. The same charge every month. Right for most things.
Reducing balance — a percentage a year of what the asset is still worth, so the charge is largest in the first year and tapers. This is the common commercial treatment for vehicles, which is why it is the default there: a bakkie really does lose most of its value early. Give the asset a rate if you have one; if you leave the rate blank, Ledgr uses double-declining balance — twice the straight-line rate for the life, so a four-year vehicle is charged 50% a year on its carrying amount (R100 000 is charged R4 166.67 in its first month).

The last month is trimmed, on purpose.

The final charge is adjusted so the book value lands exactly on the residual value rather than a few cents past it. That off-by-a-few-cents is the classic fault in a hand-built spreadsheet schedule, and it is the kind of difference that costs somebody an afternoon at year end.

The monthly depreciation run

Depreciation is charged monthly rather than once a year, so the profit and loss you look at in August carries August's depreciation instead of a surprise arriving in February.

You start the run; Ledgr does not run it on a schedule. Charge depreciation up to a date from the fixed asset register — month end is the natural moment, alongside closing the period. That is deliberate rather than unfinished: the run posts to the general ledger, and a journal appearing in a closed period because a timer fired is not something to do to somebody else's books.

Who can do what.

The register sits under Reports, so it follows the Reports permissions: viewing it needs view, adding an asset create, revising one edit, and deleting one delete. Running depreciation and disposing of an asset both post to the general ledger, so each needs approve on Reports — somebody who can add assets but not approve will not see the Run depreciation button.

The run posts one journal per period: depreciation expense debited, accumulated depreciation credited. It is safe to run twice and safe to run after a gap — each asset records the period it has been depreciated through, so a run after three months away produces exactly three months of charges, once. Nothing is lost by forgetting a month.

Revising a life

If it becomes clear an asset will last longer or shorter than you thought, change the remaining life. Ledgr applies the new life forward and does not rewrite the depreciation already charged — which is correct: a change in estimate is not an error, and restating closed periods would move numbers in books you have already reported.

Selling or scrapping one

Record the disposal with its date and what you received. Ledgr removes the cost and the accumulated depreciation from the balance sheet, compares the proceeds against what was left, and posts the difference as a gain or loss on disposal. Scrapping is the same thing with proceeds of nil.

The asset stays in the register, marked as disposed. Deleting it would be deleting the history the disposal journal refers to.

What it feeds

The balance sheet — cost less accumulated depreciation, by class.
The income statement — the monthly depreciation charge.
The fixed asset register itself, which is what an auditor asks for first.
The ITR14 — see SARS returns. Ledgr's depreciation is the accounting charge; the wear-and-tear allowance SARS permits is worked out from the same register at year end.

Put the bakkie on the balance sheet

Capture it once, then charge depreciation from the register at each month end.

Open Ledgr Reports

Common problems

What you see	What to do
"residualValue must be less than cost — otherwise there is nothing to depreciate"	The residual is what you expect the asset to still be worth at the end. If it equals or exceeds the cost there is no cost to spread, so the register would carry an asset that never depreciates. Lower the residual, or leave it at zero.
An asset charged no depreciation this month	Check its class. Land and buildings are not depreciated — buildings attract section 13 allowances instead, which are a tax computation rather than a book charge — and the run reports each such asset by number rather than silently skipping it.
"Asset … is already disposed of"	A disposal is final: the proceeds are recorded, the accumulated depreciation is released, and the gain or loss is posted. There is nothing left to depreciate or dispose of a second time.
An asset will not delete	It has depreciation posted to the ledger. Dispose of it instead — deleting would leave the accumulated depreciation stranded on the balance sheet with no asset against it and no entry that could ever close it.
"Unknown asset class"	The class list is SARS' Binding General Ruling 7, so it is the set of write-off periods an SA business may actually claim. Pick the nearest one rather than typing your own — your accountant will recognise it, and the ITR14 depends on it.
The register is empty on a company that owns things	Capitalising is a decision, not a detection: an asset gets onto the register when somebody puts it there, or when a purchase is capitalised rather than expensed. Nothing sweeps your bills looking for laptops.
Depreciation is charged but the balance sheet has not moved	The monthly run posts to the ledger, so the balance sheet moves as at the period you ran it for. Check the report's date rather than today's.