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QuickBooks and fixed assets
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Flagship
Posted 1/14/2020 10:16 (#7973210)
Subject: QuickBooks and fixed assets


We just released a new book about keeping track of fixed assets in QuickBooks....

The QuickBooks Farm Accounting Cookbook™, Volume IV:  Fixed & Depreciable Assets:  Machinery, Breeding Livestock, Buildings, and Land

Web page:  http://www.goflagship.com/cbk4.html

The book's approach is to set up Items in a special way to allow them to track fixed assets. You end up with one Item for each fixed asset, except for "group" assets like breeding livestock, where one Item represents any number of like assets (a group of cows acquired in the same purchase, for instance).

Using Items gives you a detailed fixed asset list kept entirely within QuickBooks, makes it easy to update asset values for preparing a market value balance sheet, and--maybe the most important for many of us--makes communicating with your tax preparer about fixed asset purchases / sales / trade-ins / disposals easier and more foolproof. The reports you can get from QuickBooks for income tax purposes can be keyed to asset numbers on your tax preparer's asset list (no confusion about fixed asset at tax time).

You can see the entire transaction history for any fixed asset with a couple clicks from the Item List--purchase, sale or trade-in, and value adjustments. Also, there is two-way linkage between assets you have acquired with a trade-in. (If you look up the trade-in asset, you can find out what it was traded in on, and vice versa.)

Using Items also lets QuickBooks keep track of fixed assets as if they were an inventory. If you start with a group of 50 cows, and over the years some die and some are culled, QuickBooks will show how many remain in that group. (Death loss and cull sales get entered in QuickBooks--which you need to do anyway, for communication with your tax preparer.)

With Items there's never a need to use Journal Entries, debits or credits. All transactions are entered as Checks, Bills, etc.--the forms everyone is familiar with.

I don't think you will find this approach discussed anywhere else, because it is limited to being used in a cash basis accounting situation--which covers most of agriculture--but is not for accrual accounting. Also, note that the approach can only be used in the QuickBooks desktop editions...not QuickBooks Online, which isn't capable of the slick things the desktop editions can do with Items.

One more thing:  I use this approach for my own fixed asset records, and in my opinion it is one of the handiest non-standard QuickBooks setups you can use for cash basis farm/ranch recordkeeping. (At tax time, fixed asset reports are a breeze now...no longer the struggle that they used to be.)

For the past two days our Web site has had a technical problem with content tailored to smartphones, so until we get that figured out the site is best viewed with a desktop PC or a tablet.

Mark Wilsdorf
Flagship Technologies, Inc.
Author of The QuickBooks Farm Accounting Cookbook™ series.

[The powers that be on NAT permit single postings of relevant new product announcements]

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