Plant and Machinery
Cost of production machines, generators and heavy equipment, on the Balance Sheet. Depreciated each month through Accumulated Depreciation.
In detail
Plant and Machinery holds the cost of production machines, generators, boilers, workshop tools and similar heavy equipment. The cost capitalised includes transport, customs duty, installation and testing, because all of that is needed before the machine can work, and the Landed Cost Voucher or a Purchase Invoice line can add those charges to the asset. Depreciation runs monthly from the Asset's available-for-use date; the IRD pool rate for machinery is 15 percent a year, and the auditor compares book and tax depreciation at year end. Spare parts and consumables are expenses or stock, not additions here. A machine bought on credit credits Creditors; the depreciation never touches this ledger, only Accumulated Depreciation.
Formula
Monthly depreciation = (Cost incl. installation - Salvage value) / Useful life in months.
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Plant and Machinery | Rs 8,00,000 | |
| Creditors (supplier) | Rs 8,00,000 |
How to record it in BRAccount
- 01Go to Stock > Item > New, tick Is Fixed Asset and choose Asset Category Plant and Machinery.
- 02Go to Invoicing > Purchase Invoice > New for the supplier, add the machine at Rs 8,00,000 including installation, and Submit.
- 03Open the Asset from Assets > Asset, set the available-for-use date, useful life and salvage value, then Submit.
- 04Open Assets > Asset Depreciation Schedule to read the monthly charge.
- 05Open the Plant and Machinery ledger from the chart; the cost sits as a debit and never changes until disposal.
When to use it
Post through an Asset record created from the Purchase Invoice. Installation and transport costs are capitalised into the machine's cost.
Example from the demo books
Dr Plant and Machinery Rs 8,00,000, Cr Creditors Rs 8,00,000 for a diesel generator bought on credit from a Birgunj supplier.