Depreciation and Amortisation

Depreciation and Amortisation groups the charges that spread the cost of long-lived assets over the years they are used: depreciation of plant, furniture, equipment and vehicles, depreciation of right-of-use assets under leases, and amortisation of software and other intangibles. The group posts nothing; the Asset Depreciation Schedule of each Asset record posts a Depreciation Entry journal to the ledger beneath, and the credit goes to the matching accumulated depreciation account. The demo books show Rs 1,235.54 for the first month, the straight-line charge on the chairs and the laptop. Book depreciation follows the useful life the owner sets; tax depreciation follows the Income Tax Act pool rates, and the gap gives rise to deferred tax.

Depreciation and Amortisation = Depreciation - PPE + Depreciation - Right-of-Use Assets + Amortisation - Intangible Assets

1. 01Go to Accounts Setup > Chart of Accounts, expand Expenses, then Depreciation and Amortisation.
2. 02Open Assets > Asset Category to see which depreciation ledger each category uses.
3. 03Open Assets > Asset Depreciation Schedule to see the upcoming entries.
4. 04Read the group total on Financial Reports > Profit and Loss Statement.
5. 05Compare it with the tax depreciation schedule when computing Current Tax.

Do not post here. The monthly depreciation Journal Entry uses the three child accounts.

Depreciation and Amortisation shows Rs 1,235.54 for the demo company's first month.