An Asset Category classifies different assets of a Company.

The initial stage in asset management involves establishing an Asset Category corresponding to the type of assets. For instance, a group containing all desktops and laptops could be designated as the “Electronic Equipment” Asset Category.

Within the Asset Category, you can establish default depreciation methods, periodicity, and depreciation-related accounts, which will be applicable to all assets categorized therein.

Note: You can also set default depreciation-related Accounts and Cost Centers in Company master.

To access the Asset Category list, go to:

Home > Asset > Assets > Asset Category

1. How to create an Asset Category

1. Enter a name for the Asset Category.
2. Tick the box for ‘Enable Capital Work in Progress Accounting’ if you wish to keep track of assets under a temporary balance sheet account rather than the corresponding asset account. To know more, visit this page.
3. Save.

1.1 Additional options when creating an Asset Category

1. By activating the “Enable Capital Work in Progress Accounting” option, accounting entries for assets within this category, which are currently unused, will be recorded in the Capital Work in Progress accounts. This occurs when you possess the asset, but it is not yet in use, indicated by a future “Available for Use Date.” If your assets are utilized immediately upon acquisition, it’s advisable to deactivate this feature. Disabling this option will bypass Capital Work in Progress accounting.

2. Features

2.1 Finance Book details

You can associate a Finance Book if you wish to report depreciation differently. In this section, you can input the following details:

• Depreciation Method: Select a method by which you’ll record asset depreciation within this category. For more information, refer to this page.
• Depreciation Frequency (Months): Specify the number of months during which depreciation will be accounted for. After this period, the asset may be retired.
• Total Number of Depreciations: Indicate the number of depreciation entries to be recorded within the chosen timeframe.
• Depreciation Rate: The rate of depreciation applied over the specified period. This is determined based on the selected Depreciation Method.

2.2 Accounting Details

The following account details can be set to record asset values in the ledger:

• Company
• Fixed Asset Account
• Accumulated Depreciation Account
• Depreciation Expense Account
• Capital Work In Progress Account

3. Related Topics

1. Asset