How To Manage Your Capital Assets
What you need to know:
Properly tracking capital assets helps maintain an accurate financial picture of your business. Effective asset management also supports equipment replacement planning, helps reduce tax liabilities, and can strengthen your position when seeking financing.
AgExpert Accounting creates a set of default capital asset classes when you set up a business. As your operation grows, you may need to add additional capital asset classes to your chart of accounts and manage the related CCA classes. When creating a new capital asset class, you must also create a corresponding accumulated depreciation account and link both accounts to the appropriate CCA schedule. AgExpert Accounting tracks your capital assets as sub-items within their respective asset classes, eliminating the need to create a new account each time you purchase a piece of equipment.
Historical capital assets (or existing capital assets) are those assets that have been purchased prior to using AgExpert Accounting. They are typically added when first setting up your business, whereas newly purchased capital assets would be added through transactions, thus capturing other important details such as down payments, financing and trade-ins.
What you need to do:
Have purchase records available on hand with details of capital asset purchases.
Confirm with your accountant what class your new capital asset belongs to.
Check with your accountant to confirm if the new capital asset is associated with the Accelerated Investment Incentive Program (AIIP) or the Designated Immediate Expensing Properties (DIEP).
Before entering a capital asset class into your chart of accounts, ensure it does not already exist.
Confirm which class number your new capital asset class belongs to along with the user rate %.
Select an available account number for the new capital asset account and associated depreciation account.
How to (Step by Step):
For Setting Up a New Capital Asset Account:
Click Chart of accounts.
In your Fixed assets section, select Add account or group and click Add account.
Select Capital asset from the Type drop-down menu.
Enter the Name of the new capital asset class.
Enter Account number.
Enter a Default description, if necessary.
Select Use GST on this account and/or Use PST on this account, if applicable.
Click Save.
In your Fixed assets section, Click Add account or group and select Add account.
Note: You need to add a paired Accumulation Depreciation account to match the new capital asset account that was created.
Select Capital asset from the Type drop-down menu.
Enter Name for the depreciation account.
Tip: The default accounts added by AgExpert add ‘Accum Dep - ’ to the beginning of the name to identify the appreciation account.
Enter Account number.
Tip: The default accounts added by AgExpert use a number adjacent to that use by the new capital asset account.
Enter a Default description, if necessary.
Select Use GST on this account and/or Use PST on this account, if applicable.
Click Save.
Select More.
Select Capital assets.
Click Manage CCA classes.
Select Add CCA class.
Use the drop-down menu to select the appropriate CCA class.
Enter Beginning balance, if necessary.
Enter User rate.
Use the drop-down menu to select the Book value account.
Tip: This is the first account you created above.
Use the drop-down menu to select the Accumulated depreciation account.
Tip: This is the second new account you created above.
Click Save.
For Adding Historical Capital Assets:
Click More.
Select Capital assets.
Click Add a capital asset.
Enter Purchase date.
Use the drop-down menu to select the appropriate CCA class.
Enter a Description of the capital asset (For example, Make and model).
Enter Serial number, if desired.
Check the box for AIIP or DIEP, if necessary.
Enter Purchase price before taxes.
Enter the Business percent for the new asset. If this amount is less than 100%, you must use the drop-down menu to select an Account to apply the personal portion to.
Click Save.
For Recording a Capital Asset Purchase:
Click the orange plus sign.
Select Withdrawal.
Use the drop-down menu to choose Supplier. If your desired supplier does not already exist in your books, click Add new supplier and fill out the details in the slide-out, and click Save.
Note: Only First name and Last Name OR Company name is required to be entered, but it is recommended to also check the box so that the contact is both a Supplier and a Customer.
Enter the Date of your transaction by using the calendar or manually entering the day, month, and year.
Select the appropriate Bank account. If the wrong payment source appears, click ‘x’ and Choose the correct bank account or credit card.
Enter a Withdrawal total for the purchase.
Add a Reference (optional).
Note: This could be a cheque number, invoice number, or any other way you want to help identify the transaction. This field is searchable from the Transactions page.
If you wish to add Attachments to the transaction, click Add and browse your computer to select a file, then click Open.
Use the drop-down menu to select C+ Capital Asset Purchase.
Select the capital asset Account using the drop-down menu.
Enter a Description of the capital asset (For example, Make and model).
Enter Serial number, if desired.
Check the box for AIIP or DIEP, if necessary.
Enter Purchase price before taxes.
Enter GST/HST, if applicable.
Enter PST/QST, if applicable.
Enter the Business percent for the new asset. If this amount is less than 100%, you must use the drop-down menu to select an Account to apply the personal portion to.
Click Save.
Verify the subtotal, taxes, and total are correct for the withdrawal.
When the transaction shows as Balanced, you can:
Click Save and close to record the transaction and take you back to the last screen you were viewing, or:
Click Save and new to record the transaction and open a new Withdrawal screen.
References and Additional Resources
Still have questions? Contact support
Contact us at 1-800-667-7893 or email support@fccagexpert.ca if you require additional support. You can find other help options under the question mark Icon in the top right of AgExpert Accounting at any time.