Set Depreciation Rates and Methods

By Gregg Hopfeldt · 2025-05-20

Configuring depreciation rates and methods creates a defensible, audit-ready foundation for your fixed asset register—one where every calculation is consistent, repeatable, and quietly confident.

Purpose

Depreciation settings establish the calculation logic that governs how your asset values reduce over time. A stable, verified configuration ensures your register produces reports that match your accounting policy and remain unshakeable under audit review.

Logic

The register applies depreciation using two verified methods:

  • Straight Line — Depreciates the asset by an equal amount each year over its useful life.

  • Diminishing/Reducing Balance — Applies a fixed percentage to the remaining book value each year, resulting in higher depreciation in earlier years.

Each asset category (Computer Equipment, Furniture and Fixtures, Office Equipment, Machinery, Buildings, Sundry) carries its own rate and method. These settings act as defaults for new assets in that category and anchor all future depreciation runs — for the practical steps, see our help guide on configuring rates and methods.

Changing rates or methods does not rewrite historical depreciation already posted. The new settings apply to future calculations only, keeping your records stable and backward-defensible.

Steps

  1. Open the Fixed Asset Register.

  2. Select Settings in the toolbar.

  3. In the Depreciation Configuration dialog, locate Depreciation Settings by Category.

  4. For each category, set the Rate (%) and Method (Straight Line or Diminishing/Reducing Balance) to match your accounting policy.

  5. Confirm the Start of the Financial Year is correct—this date anchors the depreciation calculation periods.

  6. Select Save Configuration.

Outcome

A successful configuration produces a linen-clean register where every asset category follows a consistent, documented rule. Your depreciation reports will align with your books, your audit trail will show verified calculation logic, and your register will remain stable across financial year boundaries—quietly confident, with zero surprises.

When to review these settings

  • When your accounting policy changes.
  • Before rolling over to a new financial year (verify rates match your year-end position).
  • After importing assets via CSV—confirm category assignments align with the correct depreciation rules.
  • When adding assets with Smart Entry, which requires configured rates before it can calculate depreciation.

Common issues

  • An incorrect category assignment applies the wrong rate and method to grouped assets.
  • Saving new settings does not change past depreciation—historical values remain as originally posted.
  • If rates do not match your accounting policy, register reports will not reconcile with your general ledger.