Fixed assets and depreciation

Register fixed assets, run straight-line or reducing-balance depreciation schedules and book disposals with the resulting gain or loss.

What fixed-asset depreciation is

A fixed asset is something your business buys to use over several years — a vehicle, a laptop, office furniture, a building. Because it earns its keep over time, you don’t expense the whole cost in the month you buy it. Instead you spread that cost across the asset’s useful life: that spreading is depreciation. Qontab registers the asset, builds the full depreciation schedule for you, and books each period as a balanced journal entry so your profit, your balance sheet and your taxable result all reflect the asset wearing out.

It matters because depreciation is what keeps your books honest about value. Expense a five-year van in one go and you’ve understated this year’s profit and overstated next year’s; depreciate it and each year carries its fair share of the cost.

Registering an asset

Add a fixed asset by giving it a category — vehicle, equipment, furniture, computer, building or other — along with the figures that drive the schedule:

• Acquisition cost and acquisition date — what you paid and when. These are fixed once the asset is created.
• Residual value — what the asset will still be worth at the end of its life. Only the cost above residual gets depreciated.
• Useful life — how many months you’ll use it. Qontab spreads the depreciable amount over that span.

You can also point the asset at the general-ledger accounts it should use — the asset account, the depreciation expense account, accumulated depreciation, and a gain/loss-on-disposal account — and optionally record how you paid for it so the purchase posts straight to your chart of accounts. The moment you save it, Qontab generates the schedule; you can regenerate it any time before the first period is booked.

Depreciation methods

Qontab offers three methods, each on a monthly or yearly frequency. The first period is pro-rated from the acquisition day, and the schedule never depreciates below the residual value.

• Straight-line — the same amount every period: (cost − residual) ÷ useful life. Simple and the most common choice.
• Reducing-balance — a fixed rate applied to the falling net book value, so charges are heavier early and taper off. The rate comes from the capital-allowance rate you set, or is derived from the useful life.
• Accelerated — sum-of-the-years’-digits, another front-loaded pattern that writes more off in the early years than straight-line.

Booking depreciation

The schedule is a plan, not a posting. Depreciation hits your books only when you book a period. Booking a period posts one balanced journal entry:

1. Debit the depreciation expense account — this is the cost that lands in your profit & loss.
2. Credit accumulated depreciation — a contra-asset that grows on the balance sheet.
3. Qontab lowers the asset’s net book value by that amount and marks the line booked, so it can never be booked twice. When net book value reaches the residual, the asset becomes fully depreciated.

You can book one period at a time, or book everything due up to a chosen date across every active asset in one pass.

Disposing an asset

When you sell or scrap an asset, record a disposal with the sale date and the proceeds. Qontab settles the whole thing in one posting sequence:

• It first books any depreciation still owed up to the disposal date, pro-rated for the part-month you held the asset.
• It removes the asset at cost and clears its accumulated depreciation, taking it off the balance sheet.
• It records the proceeds (to the linked bank account when you have one) and posts the difference between proceeds and net book value as a gain or loss on disposal.

Sell above net book value and you book a gain; sell below it, a loss. Either way the asset’s remaining schedule is cancelled and its status moves to disposed.

With AI (MCP)

Through the Qontab MCP connector an AI assistant can manage your register in plain language. The asset tools — list_assets, get_asset, create_asset, update_asset, book_asset_depreciation, dispose_asset and delete_asset — cover the full lifecycle. Assets are an advanced domain, so these tools are available on the Enterprise tier only; a call on a lower plan returns an upgrade prompt rather than running.

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