What Is Fixed Assets Accounting?
So that you understand where the Fixed Asset list and vehicle mileage tracker fit into the scheme of things, let me begin by defining the term fixed assets and by explaining just what fixed assets accounting is.
Fixed assets historically refer to assets that are fixed in place. For example, a factory or building set into concrete is fixed. Likewise, a 20-ton piece of machinery bolted into the floor is also fixed.
In the context of QuickBooks and its Fixed Asset list, fixed assets also include items such as furniture, equipment, and vehicles — things that aren’t so “fixed” but instead are assets that last a long time — that a business, therefore, must depreciate.
Now that you know what fixed assets is — at least according to Steve Nelson — let me define fixed assets accounting. Fixed assets accounting, I’m going to say, refers to three accounting tasks:
Tracking your fixed assets’ costs, descriptions, and other relevant information so that you can take proper care of your stuff
Calculating and recording fixed assets’ depreciation so that tax returns and financial statements can be prepared
Calculating and recording the effect, including the gain or ...