Property, Plant and Equipment

Property, Plant and Equipment, numbered 1110, is the Fixed Asset group that totals the physical things a business uses for years: Land, Buildings, Plant and Machinery, Furniture and Fixtures, Office Equipment and Vehicles, less the credit balance of Accumulated Depreciation. The result is the book value of the fixed assets, the figure the Balance Sheet shows. Each child ledger holds cost; the Asset records under Assets hold the detail of each item, its useful life and its depreciation schedule, and the monthly Depreciation Entry journals bring the book value down over time. The IRD allows depreciation by its own pools and rates, so the auditor reconciles book depreciation to tax depreciation from these ledgers at year end.

PPE book value = Sum of cost ledgers (Land + Buildings + Plant and Machinery + Furniture + Office Equipment + Vehicles) - Accumulated Depreciation.

1. 01Go to Accounts Setup > Chart of Accounts and expand Assets > Non-Current Assets > Property, Plant and Equipment.
2. 02Read the children: six cost ledgers and Accumulated Depreciation with a credit balance.
3. 03Open Financial Reports > Balance Sheet; PPE shows Rs 1,40,000 cost less Rs 1,235.54 after the first depreciation month.
4. 04Open Assets > Asset to see the item behind each cost ledger with its schedule.
5. 05Post new assets through a Purchase Invoice for a fixed asset item, never to this group directly.

No direct postings. A Purchase Invoice for a fixed asset item posts to the right child account; the Asset record then tracks it and its depreciation.

After the two demo assets, PPE on the Balance Sheet is Rs 1,40,000 cost less accumulated depreciation of Rs 1,235.54 for the first month.