Once you set up Fixed Asset Manager in QuickBooks Desktop, you might be wondering how to use FAM to manage fixed assets. In this article, we are going to show you how to manage Fixed Assets using Fixed Asset Manager (FAM) in QuickBooks Desktop in very simple steps. In addition to this, we will also introduce you to some of the terminologies, depreciation methods, and how to generate predefined reports in FAM so you can easily manage your asset information. If you are in any trouble, you may also contact our team of Intuit certified ProAdvisor to get your problem solved. Dial +1-844-405-0904.
NOTE: The Fixed Asset Manager (FAM) is the only compatible with QuickBooks Desktop Premier Accountant, QuickBooks Enterprise, and QuickBooks Enterprising Accountant.
Before going further, we are presuming that you have already set up the Fixed account Manager (FAM) with your QuickBooks Desktop. If not, then click on the link above to do so.
Important Terms you need to understand
Capitalization Limit: This is the dollar amount limit for fixed asset purchases in order to qualify as an asset instead of an expense. For instance, it could range somewhere between $200-$20,000 per item purchase. This limit also depends upon the size of the company.
Fixed Assets: Tangible items (i.e. those items that can be recognized by a sense of touch like machinery, furniture, equipment, computers, etc.) owned by the company. The conditions are their shelf life should be greater than a year and the valuation of these items should be greater than the company’s capitalization limit.
Depreciation: After utilizing an asset its value decreases for sure and that decline in price is known as depreciation cost. This can be caused by deterioration, outdated assets, or the retirement of any machinery or equipment after long use. Usually, depreciation is only applicable to tangible assets like machinery, equipment, etc. For tax-related purposes, it is necessary to record the lost values.
Disposal of Asset: This refers to the loss of assets in the company by any means such as theft, sale, or throw out.
Types of Depreciation Methods
Straight-Line Method (SL): This is the easiest way to allocate an equal amount of depreciation in every time period.
Declining- Balance Method (150% to 200% DB): With the help of this method, you can allocate depreciation expense to the early year of the asset’s life when it is new. When the asset is new, downtime is less and fewer repairs in the early days. When the asset is new, the company can take more advantage as compared to the latter days of the asset’s life.
MACRS (Income Tax Method): This is a combination of both the Straight-Line Method and the Declining-Balance Method. For the one-half year’s depreciation, it uses the Declining-Balance Method in the first year and after that, you have to switch to the Straight-Line Method in the Middle of the asset, so a 5 years asset takes 6 years to depreciate.
NOTE: If you want to know more about the depreciation method, then you can visit the official IRS website.
Predefined Reports
ACE Adjustment Calculation: The purpose of this calculation is to find out the total ACE adjustment so that you can calculate the tax return of the company later. In each group, assets are grouped by category and sorted according to the asset number.
Amortization Schedule by General Ledger (G/L) Account Number: From here, you can see a summary of the activity of the amortized assets. Within each group, assets are grouped by General Ledger (G/L) account number and sorted by the asset number.
Amortization Schedule by User Defined (1 to 5): From here, you can see a summary of the activity of the amortized assets, they are defined by the one-user defined classification. Within each group, assets are grouped by user-defined fields and sorted based on the asset number.
AMT Adjustment Calculation: From here, you can print the information that is required for AMT depreciation adjustment reporting (Federal Depreciation – AMT depreciation = AMT adjustment). Within each group, assets are grouped by category and sorted based on the asset number.
Asset Disposition by Asset Sales Description: According to the sales description assigned to each asset, from here you can view a summary of deposition information. Within the group, assets are grouped by the asset sale description and sorted based on the asset number.
Asset, Basis & Disposal Detail Report: In the Asset and Disposal tab, you can print the asset details for each asset that you can see on the screen.
Assets required in the current year: From here, you can see a summary for each asset that you buy in the current year. Within the group, assets are grouped according to the general ledger account number and sorted according to the acquisition date.
Depreciation Schedule by G/L Account Number: From here, you can view the activity summary of each asset, and assets are grouped according to the general ledger account number and sorted according to the acquisition date, within each group.
Depreciation Schedule by User Defined (1 to 5): From here, you can view the activity summary of each asset, grouped according to the one-user-defined field. Within each group, assets are sorted according to the assets number.
Lead Scheduled by category: The purpose of this is to show the activity summary of each asset, grouped by category, in a traditional lead format. Within each group, assets are sorted according to the account number.
Lead Schedule by G/L Asset Account: From here, you can see the activity summary for each asset, grouped according to the general ledger account number, in a traditional lead schedule format. Assets are sorted by asset number.
Lead Scheduled by Location: From here, you can see the activity summary for each asset, grouped according to the location, in a traditional lead schedule format. Within each group, assets are sorted by asset numbers.
Lead Schedule by Tax Form and Property Description: From here, you can see the activity summary for each asset, grouped by tax form and property description as well, in a traditional lead schedule format. Within each group, assets are sorted by the asset number.
Monthly G/L Accumulated Account Summary: From here, you can see the total monthly addition and deletion as well as beginning and ending balances. In this report, assets are grouped by the General Ledger Account number. If there is no account number is assigned to an asset then it will be grouped in “No Account Number”.
Monthly G/L Asset Account Summary: From here, you can see the total monthly accumulated depreciation/amortization additions and deletion, and their beginning and ending balances as well. The asset in this report are grouped according to General Ledger Accumulated Depreciation and Amortization account. If there is no account number is assigned to an asset then it will be grouped in “No Account Number”.
Monthly G/L Expense Account Summary: From here, you can see the monthly depreciation/amortization expense additions and deletions, ending accumulated depreciation, and amortization balances. The assets of this report are grouped according to General Ledger Depreciation and Amortization Expense Account. If there is no account number is assigned to an asset then it will be grouped in “No Account Number”.
NOTE: You will only able to view this report from the list only after the data is entered.
Personal Property Schedule by Year of Acquisition: From here, you can see the summary of depreciation amount for assets that you have marked as personal property. Here, the assets are grouped according to the year in which each asset was placed in service and within each group, assets are sorted according to the acquisition date.
Projection by Category: From here, for each asset that you own, you can see their five-year projection. The assets are grouped according to the category and within each group, assets are sorted according to the acquisition date.
Remaining Basis Over Remaining Life Report: From here, you can find the assets that are not entirely depreciated yet. Within this report, assets are grouped and sorted according to the category.
The Bottom Line
This is all information that you will be needed in maintaining fixed assets, with this, we hope now you learn how to manage fixed assets using Fixed Asset Manager (FAM) in QuickBooks Desktop. We have discussed important terms, types of depreciation methods, and predefined reports that you may encounter while using FAM and QuickBooks Desktop.
If you ever face any issue during any operation of FAM or any other QuickBooks problem then you can contact QuickBooks ProAdvisor for an instant solution. For more, information call us at our 24/7 toll-free number +1-844-405-0904.