Asset category: Plant and Machinery
Production machines and heavy equipment, depreciated straight line.
In detail
Plant and Machinery covers production machines, generators and heavy equipment, depreciated straight line over roughly ten years. Cost posts to Plant and Machinery - YFF and each month the schedule debits Depreciation - Property, Plant and Equipment - YFF and credits Accumulated Depreciation - YFF. Machines that run extra shifts wear faster, so this is the category where Asset Shift Allocation and Asset Shift Factor are useful: a double shift month depreciates twice as much. Installation and transport costs belong in the asset cost, not in expenses. For income tax the IRD applies its own pooled rates, which is what a second Finance Book is for.
Formula
Monthly depreciation = (Cost - Salvage value) / Useful life in months x shift factor; Rs 3,00,000 / 120 = Rs 2,500
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Depreciation - Property, Plant and Equipment - YFF | Rs 2,500 | |
| Accumulated Depreciation - YFF | Rs 2,500 |
How to record it in BRAccount
- 01Go to Assets > Asset Category and open Plant and Machinery; confirm the accounts and useful life.
- 02Record the machine through a Purchase Invoice with Is Fixed Asset ticked; include installation cost.
- 03Open the draft Asset, set the available for use date and submit.
- 04For extra shifts, go to Assets > Asset Shift Allocation and submit the changed months.
- 05The schedule posts the monthly entry below.
When to use it
Pick it on machinery; use Asset Shift Allocation if a machine runs extra shifts.
Example from the demo books
A generator of Rs 3,00,000 over 10 years.