Tally Accounting
Posted by Asok K Nadhani on

Fixed Asset & Depreciation Accounts in Tally PRIME

Fixed Assets Accounting

Every organization should provide Depreciation in its Fixed Assets, and provide a comprehensive Table showing the details of value of Asset at the beginning of the Financial Year; Addition of Assets, Sales of Assets,  Depreciation written off during the Financial Year and Value of Assets at the end of Financial  Year.

Some organisations show the break of value of assets into Original acquisition Cost & Accumulated Depreciation, while some organisation follow the simpler form, showing just the WDV of the Asset, at the beginning & end of the Financial Year.

Maintaining these details are statutory requirements. However, Tally does not provide any Fixed Asset and Depreciation schedule in its standard module. A special Fixed Asset module is separately available, for large organisation having a number of asset (e.g a manufacturing company).

In Tally PRIME, Fixed Assets Analysis Report provides some key figures, which may be helpful to prepare Fixed Asset Schedule of balance Sheet.

We briefly describe the steps of Accounting Entries related to Fixed Accounts and Fixed Asset Analysis Report.

Accounting entries related to Fixed Assets

  • Fixed Asset Ledger Account Master creation: Create a Ledger Account under Fixed Assets Account Group. Enter the Opening Balance if any.
  • Acquisition of Fixed Asset: For Purchase of Fixed Asset, create a Purchase Voucher. Enter the Fixed Asset ledger Name, supplier Ledger Name and cost of Fixed Asset. Entry for Return of Fixed Asset, Discount on Purchase, or any adjustment which reduces the purchase cost, should be through Debit Note. Do not enter Purchase Cost diminution entries through Journal Voucher. For acquisition of Fixed Asset other than through Purchase, create a Journal Voucher.
  • Disposal of Fixed Asset : For Disposal (Sale / Scrap) of Fixed Asset, create a Journal Voucher. Do not create Debit Note for Sale / Disposal of Fixed Asset.
  • Depreciation Provision : Create  Journal Voucher, to enter provision of Depreciation, at the applicable Rate, for the Asset during the current year. You have to manually compute the Depreciation and enter the Depreciation Amount. For new Asset purchased / acquired during the Financial Year, keep in mind the Number of Days shown in the Report, and compute depreciation as per rules.
  • Fixed Asset Schedule of Balance Sheet : Having entered all the accounting entries related to Fixed Asset, as stated, you may view the Fixed Asset report to get key data in compilation of Fixed Asset Schedule of Balance Sheet. The Fixed Asset Report in Tally prime provides key data to create the Fixed Asset Schedule. It does not provide the Report in proper format of Balance Sheet Schedule.

Through GoT, you may Drill Down through Balance Sheet and then Fixed Assets to view the details of Accounting details of Fixed Asset.

Fixed Assets Analysis Report in Tally PRIME

In Tally PRIME, you may view Fixed Asset Analysis report, showing the details of Fixed Asset Accounts, helpful to compile Fixed Asset Schedule of Balance Sheet.

  • To view Fixed Asset Report, at GoT, select GoTo tab (or Press Alt+G to get Menu under Go To Menu). Select Data Analysis Reports and then select Fixed Asset Analysis ) or Type Fixed Asset Analysis , to get Fixed Asset Analysis Report.  In Number of Days column, the Number of days since Purchase of New Assets till the end of Financial Year would be shown, to compute Depreciation.
  • The Fixed Asset Analysis Report shows the details of each Asset. Press  Alt F1 to get next level details, showing list of each Asset carried from previous year, Additions of New Assets (Purchase / Acquisitions) during the current Financial Year,  subtraction (sale / scrap) of old Assets, and Balance of Assets in Hand.

Contents of Fixed Assets Analysis Report in Tally PRIME

Fixed Asset Analysis Report is a proprietary Report designed by tally, in its own way. So, let us understand the contents of the Report. We discuss the report in which Asset Ledgers are created for Assets (no Stock Items are created for Assets in Inventory System)

  • Particulars of Asset : This column shows the ledger name of the Asset
  • Opening Balance : This column shows the value of the asset carried from the previous financial year. So, this column represents Debit Balance.
  • Additions : This column shows the value of all Debits in the Asset ledger account. So, normally asset purchase value will appear. So, any voucher for Journal adjustment, etc with debits to Fixed Asset, would be reflected in this column. So, this column represents Debit Balance.
  • Deletions / Adjustments : All credits to Fixed Asset accounts are included here. So, value of assets disposed and amount of as well as depreciation provided, are both clubbed here. So, this column represents Credit Balance.
  • Closing Balance : This column shows the value of asset at the end of the period. It would be computed as Opening Balance + Additions – Deletions/ Adjustments.