Asset category: Buildings
Owned buildings and major structures, depreciated straight line over their useful life.
In detail
Buildings holds owned offices, warehouses and other structures, which depreciate straight line over a long useful life, typically 40 years. The category posts cost to Buildings - YFF, monthly depreciation to Depreciation - Property, Plant and Equipment - YFF and the running total to Accumulated Depreciation - YFF. A building that is being constructed first collects its bills in Capital Work in Progress and is moved here by an Asset Capitalization when it is ready for use. Repairs that extend the life are capitalised through Asset Repair; ordinary painting stays an expense. Over such a long life a small error in useful life compounds, so check the schedule once after submitting.
Formula
Monthly depreciation = (Cost - Salvage value) / (Useful life in years x 12); Rs 48,00,000 / 480 months = Rs 10,000
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Depreciation - Property, Plant and Equipment - YFF | Rs 10,000 | |
| Accumulated Depreciation - YFF | Rs 10,000 |
How to record it in BRAccount
- 01Go to Assets > Asset Category and open Buildings; check the useful life and accounts.
- 02Record the purchase through a Purchase Invoice, or complete construction with Assets > Asset Capitalization.
- 03Open the draft Asset, set the available for use date and submit.
- 04The schedule posts the entry below each month; review it under Asset Depreciation Schedule.
When to use it
Pick it on construction completed through Asset Capitalization or a building purchase.
Example from the demo books
An office building depreciated over 40 years.