@JamieD said: @HOSPM. In this situation all you need to do is categorize the refund as 'refund for income' and choose the specific asset account and from there, you will need to reverse the journal transaction that was performed to record the depreciation so that it zeroes the balance out. Hope that helps!
Nooooooo!!! You can't cancel out the original journal!!! Basic accounting principles being ignored in this advice!
This scenario is in essence the same as a sale of an asset, so in the financial year you sell you have to show it as an asset disposal at cost, and show a separate journal dated in the new financial year to show the value of accumulated depreciation on the disposed asset.
@alexlewiszarkos Yes the date is definitely correct. It seems that there's a delay in in record in the Financial Statements whenever we key in journal transactions eh? Especially depreciations..
The depreciation expense appear in my P&L after a few hours.
@ErnestChua That's a relief that the journal entry is reflecting in your reporting - albeit doing it on a delay, I can't say that it's something that I've heard of happening to a large amount of people, however, can you confirm if this seems to happen with every transaction that you enter into Wave or just in this instance? In either case, if you'd like us to further investigate, I'd be happy to help dig in. If you can send me a DM with your email address, I can start a support ticket and take it from there. Since this seems like a pretty isolated issue, it might be best to work on this together and I'm happy to see what I can do
Hi I'm a little confuse here. For the journal entry, the credit will go to the Depreciation and Amortization account but the debit should be from where? From the long term asset account? And will this depreciation reflect in the P/L statement? Thanks
Hi all! After reading some of the comments below, it looks like the Asset categories have changed since this guide was originally written. It looks the Property, Plant, Equipment section is new - should I make a new category here for each piece of property my business owns, for example, a desktop computer, a laptop and a work desk? And do I make matching accounts for each of these under Depreciation and Amortization so I can track the value using the Journal Entry method described above? Or do I simply make a single "Depreciation" category under Depreciation and Amortization to track the decreasing value of all this property?
Hey @Ando! Thanks for reaching out. To start, as mentioned in this article, it is always a good idea to reach out to your accountant for advice on these things! But yes, in Wave we recommend creating a separate asset account for any item that you are tracking the depreciation of. For example chose Other Long-Term Assets and renamed it Other Long-Term Assets: Laptop. Then you would follow the journal transaction steps for each of the assets you add!
Hello. I am trying to log depreciation for all our of computer and furniture assets. I understand I need to make sure I use a separate asset account (ie. Other Long-Term Assets: Computer Hardware) but I'm concerned about having to create so many accounts and individual journal entries. For instance, we buy individual items to build our PCs (hard drive, graphics cards, monitors, etc.) so for each of those individual transactions, of which there are hundreds, I will track it under the Other Long-Term Assets: Computer Hardware but how do I then depreciate it? Will I really need to create hundreds of journal entries to depreciate each individual purchase? Is there a "lump depreciation" I can do? Thank you in advance.
Hi @MonS . Are you tracking the depreciation for each of these individual parts, or are you tracking the depreciation of the computer in general that these parts contribute to? Because this is the way we handle depreciation in Wave, if you are tracking these individual parts then you would have to track them individually. Ideally though, I'd reach out to an accountant if this is the case to see if they can advise on a different way to handle it.
@AlexL Hi Alex, thanks for the response. I want to track the depreciation of the computer parts in general that all the individual parts contribute to. Currently, I've been tracking all these purchases under an expense account "Computer - Hardware". So let's say I now go and re-categorize each of these individual transactions to "Other Long-Term Assets: Computers", how do I manage the depreciation of the account as a whole?
I don't think I'm explaining it very well so please let me know if I can provide further information.
Hey @MonS, this one's tricky. I'm assuming that you've taken a look at this Help Center article here, so here's what I'd recommend. Since all of those individual transactions are going to be associated with their own particular products, you might want to consider boiling them all down to one product. If you can get one collective transaction with the combined value of all of the individual parts that you're trying to track, then depreciation using that article should be fairly straight forward.
@ConnorM Hi Connor, thanks for the reply. Yes, I've read the article and I think this discussion thread is tied to it. I think you might be right that maybe merging all the individual transactions can be the first step. I'll dig into this a bit more!
@MonS a simple or might even be stupid question, the finished computers (made from the individual parts) are you selling them or using them for your day to day business operation?
Hi, how do we automate depreciation entry every year? For example a costly equipment having life for 10 years, no one including small business owner will remember to add journal entry for once a year for 10 years. Think if we have multiple items at different periods. Also the process flow to create a depreciation entry should be simplified. In the bill or receipt, more options, add depreciation, select number of years/months with few other selections and done. If it is done this way it will more sense and easy to. Hope this makes sense and clear.
Hi @jack555! Thanks for taking the time to provide your feedback on this! I agree, it would be hard to remember to add entires each year to account for depreciation of equipment. Currently, there is not a way to automate this but you have provided some good feature ideas for simplifying the process of depreciation!
Dear Wave Community members I need your help
I have just bought a machine and got the invoice this machine I need to pay for it now but will deprecate it in four years equal amounts each year.
since I am novice in accounting how can I run this workflow E.G.
Which accounts should I be using to debit and credit from the GL prospective and what journal transactions I need to put.
Please accept my ignorance
TIA
regards,
Hi @Khaled , I've merged your post into this thread as the Help Center article at the beginning should address all of your questions. If not, feel free to post again with what you're having confusion about!
Hello wave community
From New Year I have decided to switch my accounting to Wave. I have put all starting balances. I have difficulty how to create opening balance for accumulated depreciation? Accounting entry should be Owners Equity against Depreciation.
Please could let me know how I can do it in wave?
Thanks
Quick question(hopefully). I am trying to input a long term asset. I followed instructions per the article; however it is now showing that I have a liability for each asset bill created. Each asset was paid off at time of purchase; however when I add a payment to the bill it clears it off of not only the liabilities but also the assets...what did I do wrong? Is there a way to clear it off of the liabilities without clearing it off of the assets? We are still depreciating all of our assets on our taxes.
Hey guys, I have a quick question about deprecation. I just want to know whether or not i'm booking the transactions correctly within wave.
So for example, let's say I purchase a company laptop from Costco on Jan 1 2019 for $1000. I scan the receipt and then I record it under the account Computer & Electronics (under Property, Plant, Equipment).
I then classify this this as a withdrawal? from that account? (not sure about this one)
In terms of categories, I have one created within Depreciation and Amortization
for the Computer & Electronics CCA Class 10 (30%), so I also put the laptop within this category.
Since the CRA allows 30% deprecation on this asset per year, I then create a journal transaction and put 300$ in deprecation expense in the Uncategorized Expenses box. Then for the Uncategorized Income box, I select Computer & Electronics CCA Class 10 (30%), and then put 300$ again?
Hello wave community,
There is a 'payment account' section which eventually registers in your balance sheet making three account entries of specific asset, accumulated depreciation, and the 'payment account'. The issue is i dont want to fill a payment account for an asset purchased in 2017, because my uploaded bank transactions only contain 2019 entries. This affects the accuracy of the balance sheet. Is there a way i can go about this please. Also, Do i have to manually add my accumulated depreciation monthly as it does not adjust annually even after uploading date on purchase on bill.
Hi @mikescool! The journal entry that records the depreciation expense should: debit depreciation expense (increase the balance) and credit accumulated depreciation (increase the balance). How did you record the $1,030 depreciation expense? If you could share a screenshot here that would be helpful for us to have a deeper look! Once the asset purchase is recorded, that account should be left alone until the asset is disposed or written off (or a new asset is recorded to the same account).
Hi @ore! Thanks for reaching out! As this sounds a bit more complex are you able to provide some screenshots of what you are trying to achieve and what is displaying on the balance sheet? This will help us have a better understanding of the situation so we can assist you further!
@EmmaP I followed instructions per the article; however it is now showing on the balance sheet that I have a liability for each asset bill created. Each asset was paid off at time of purchase; however when I add a payment to the bill, there is a "payment account' tab that appears on the balance sheet. After choosing an option for the 'payment account' It then creates a 3rd entry on the balance sheet as against just the asset value and accumulated depreciation. Frankly; Im trying to have just two transactions (NBV and acc depr) on the B.S but its not possible after a bill is recorded as 'paid'
I think the issue here might be that you're tracking this through a bill. I believe in this case according to This Article you should have some luck with just using a journal transaction in your transactions page.
So, I'd just like to let you know that we at Wave support are not accountants. We would hate to give you erroneous accounting advice and I would highly recommend reaching out to a CPA about this. When it comes to Wave usability however, I believe in this case you may have better luck with just using the journal transaction tool.
Can you give this a try and let us know if you have any luck with this? If you solve this matter, your guidance in this thread would be very helpful!
Can you add branches to comments, at least? It's hard to track who replied to whom. Not only it's a pain to solve such a small issue like depreciation with Wave, it also makes the comments section useless!
Why should we create the accumulated depreciation account? In the journal transaction we can put in the credit directly the correspondent asset account under subcategory "Property, Plant, and Equipment". In this way the amount of the asset decreases every year accordingly with the depreciation.
Hey @JMR! Great question. The net effect is the same, but the reason we use a separate account for the accumulated depreciation (a contra-asset account, if you will) is so that you can still see the capital assets owned by the business. If you simply record the depreciation against the original asset account, it will look like you have less assets than you actually do. Asset balances are only reduced when the asset is disposed of. For instance, you might have fully depreciated an asset while continuing to own and use in the business. If you wrote that asset down to zero via depreciation, your assets would be understated.
Hi @ConnorM, so until the asset is disposed of, will it look like its value is overstated on the balance sheet? Since the depreciation is being recorded to Accumulated Depreciation and not the asset itself? Should we not look to the balance sheet to show the correct value of an asset and instead only use it for showing the value of the business as a whole? Just want to make sure I'm thinking about this correctly.
Comments
Nooooooo!!! You can't cancel out the original journal!!! Basic accounting principles being ignored in this advice!
This scenario is in essence the same as a sale of an asset, so in the financial year you sell you have to show it as an asset disposal at cost, and show a separate journal dated in the new financial year to show the value of accumulated depreciation on the disposed asset.
The depreciation expense appear in my P&L after a few hours.
@ErnestChua That's a relief that the journal entry is reflecting in your reporting - albeit doing it on a delay, I can't say that it's something that I've heard of happening to a large amount of people, however, can you confirm if this seems to happen with every transaction that you enter into Wave or just in this instance? In either case, if you'd like us to further investigate, I'd be happy to help dig in. If you can send me a DM with your email address, I can start a support ticket and take it from there. Since this seems like a pretty isolated issue, it might be best to work on this together and I'm happy to see what I can do
Hi I'm a little confuse here. For the journal entry, the credit will go to the Depreciation and Amortization account but the debit should be from where? From the long term asset account? And will this depreciation reflect in the P/L statement? Thanks
Hey @suz . The Debit should be listed as Depreciation Expense, and yes, this will appear in your P&L Report as a Depreciation Expense.
Hi all! After reading some of the comments below, it looks like the Asset categories have changed since this guide was originally written. It looks the Property, Plant, Equipment section is new - should I make a new category here for each piece of property my business owns, for example, a desktop computer, a laptop and a work desk? And do I make matching accounts for each of these under Depreciation and Amortization so I can track the value using the Journal Entry method described above? Or do I simply make a single "Depreciation" category under Depreciation and Amortization to track the decreasing value of all this property?
Hey @Ando! Thanks for reaching out. To start, as mentioned in this article, it is always a good idea to reach out to your accountant for advice on these things! But yes, in Wave we recommend creating a separate asset account for any item that you are tracking the depreciation of. For example chose Other Long-Term Assets and renamed it Other Long-Term Assets: Laptop. Then you would follow the journal transaction steps for each of the assets you add!
Hello. I am trying to log depreciation for all our of computer and furniture assets. I understand I need to make sure I use a separate asset account (ie. Other Long-Term Assets: Computer Hardware) but I'm concerned about having to create so many accounts and individual journal entries. For instance, we buy individual items to build our PCs (hard drive, graphics cards, monitors, etc.) so for each of those individual transactions, of which there are hundreds, I will track it under the Other Long-Term Assets: Computer Hardware but how do I then depreciate it? Will I really need to create hundreds of journal entries to depreciate each individual purchase? Is there a "lump depreciation" I can do? Thank you in advance.
Hi @MonS . Are you tracking the depreciation for each of these individual parts, or are you tracking the depreciation of the computer in general that these parts contribute to? Because this is the way we handle depreciation in Wave, if you are tracking these individual parts then you would have to track them individually. Ideally though, I'd reach out to an accountant if this is the case to see if they can advise on a different way to handle it.
@AlexL Hi Alex, thanks for the response. I want to track the depreciation of the computer parts in general that all the individual parts contribute to. Currently, I've been tracking all these purchases under an expense account "Computer - Hardware". So let's say I now go and re-categorize each of these individual transactions to "Other Long-Term Assets: Computers", how do I manage the depreciation of the account as a whole?
I don't think I'm explaining it very well so please let me know if I can provide further information.
Hey @MonS, this one's tricky. I'm assuming that you've taken a look at this Help Center article here, so here's what I'd recommend. Since all of those individual transactions are going to be associated with their own particular products, you might want to consider boiling them all down to one product. If you can get one collective transaction with the combined value of all of the individual parts that you're trying to track, then depreciation using that article should be fairly straight forward.
@ConnorM Hi Connor, thanks for the reply. Yes, I've read the article and I think this discussion thread is tied to it. I think you might be right that maybe merging all the individual transactions can be the first step. I'll dig into this a bit more!
@MonS a simple or might even be stupid question, the finished computers (made from the individual parts) are you selling them or using them for your day to day business operation?
Hi @jack555! Thanks for taking the time to provide your feedback on this! I agree, it would be hard to remember to add entires each year to account for depreciation of equipment. Currently, there is not a way to automate this but you have provided some good feature ideas for simplifying the process of depreciation!
Dear Wave Community members I need your help
I have just bought a machine and got the invoice this machine I need to pay for it now but will deprecate it in four years equal amounts each year.
since I am novice in accounting how can I run this workflow E.G.
Which accounts should I be using to debit and credit from the GL prospective and what journal transactions I need to put.
Please accept my ignorance
TIA
regards,
Hi @Khaled , I've merged your post into this thread as the Help Center article at the beginning should address all of your questions. If not, feel free to post again with what you're having confusion about!
Hello wave community
From New Year I have decided to switch my accounting to Wave. I have put all starting balances. I have difficulty how to create opening balance for accumulated depreciation? Accounting entry should be Owners Equity against Depreciation.
Please could let me know how I can do it in wave?
Thanks
Quick question(hopefully). I am trying to input a long term asset. I followed instructions per the article; however it is now showing that I have a liability for each asset bill created. Each asset was paid off at time of purchase; however when I add a payment to the bill it clears it off of not only the liabilities but also the assets...what did I do wrong? Is there a way to clear it off of the liabilities without clearing it off of the assets? We are still depreciating all of our assets on our taxes.
Hey guys, I have a quick question about deprecation. I just want to know whether or not i'm booking the transactions correctly within wave.
So for example, let's say I purchase a company laptop from Costco on Jan 1 2019 for $1000. I scan the receipt and then I record it under the account Computer & Electronics (under Property, Plant, Equipment).
I then classify this this as a withdrawal? from that account? (not sure about this one)
In terms of categories, I have one created within Depreciation and Amortization
for the Computer & Electronics CCA Class 10 (30%), so I also put the laptop within this category.
Since the CRA allows 30% deprecation on this asset per year, I then create a journal transaction and put 300$ in deprecation expense in the Uncategorized Expenses box. Then for the Uncategorized Income box, I select Computer & Electronics CCA Class 10 (30%), and then put 300$ again?
Hello wave community,
There is a 'payment account' section which eventually registers in your balance sheet making three account entries of specific asset, accumulated depreciation, and the 'payment account'. The issue is i dont want to fill a payment account for an asset purchased in 2017, because my uploaded bank transactions only contain 2019 entries. This affects the accuracy of the balance sheet. Is there a way i can go about this please. Also, Do i have to manually add my accumulated depreciation monthly as it does not adjust annually even after uploading date on purchase on bill.
Hi @mikescool! The journal entry that records the depreciation expense should: debit depreciation expense (increase the balance) and credit accumulated depreciation (increase the balance). How did you record the $1,030 depreciation expense? If you could share a screenshot here that would be helpful for us to have a deeper look! Once the asset purchase is recorded, that account should be left alone until the asset is disposed or written off (or a new asset is recorded to the same account).
Hi @ore! Thanks for reaching out! As this sounds a bit more complex are you able to provide some screenshots of what you are trying to achieve and what is displaying on the balance sheet? This will help us have a better understanding of the situation so we can assist you further!
@EmmaP I followed instructions per the article; however it is now showing on the balance sheet that I have a liability for each asset bill created. Each asset was paid off at time of purchase; however when I add a payment to the bill, there is a "payment account' tab that appears on the balance sheet. After choosing an option for the 'payment account' It then creates a 3rd entry on the balance sheet as against just the asset value and accumulated depreciation. Frankly; Im trying to have just two transactions (NBV and acc depr) on the B.S but its not possible after a bill is recorded as 'paid'
Hi @ore
I think the issue here might be that you're tracking this through a bill. I believe in this case according to This Article you should have some luck with just using a journal transaction in your transactions page.
So, I'd just like to let you know that we at Wave support are not accountants. We would hate to give you erroneous accounting advice and I would highly recommend reaching out to a CPA about this. When it comes to Wave usability however, I believe in this case you may have better luck with just using the journal transaction tool.
Can you give this a try and let us know if you have any luck with this? If you solve this matter, your guidance in this thread would be very helpful!
Screenshot would help a lot when describing stuff
Can you add branches to comments, at least? It's hard to track who replied to whom. Not only it's a pain to solve such a small issue like depreciation with Wave, it also makes the comments section useless!
Why should we create the accumulated depreciation account? In the journal transaction we can put in the credit directly the correspondent asset account under subcategory "Property, Plant, and Equipment". In this way the amount of the asset decreases every year accordingly with the depreciation.
Hey @JMR! Great question. The net effect is the same, but the reason we use a separate account for the accumulated depreciation (a contra-asset account, if you will) is so that you can still see the capital assets owned by the business. If you simply record the depreciation against the original asset account, it will look like you have less assets than you actually do. Asset balances are only reduced when the asset is disposed of. For instance, you might have fully depreciated an asset while continuing to own and use in the business. If you wrote that asset down to zero via depreciation, your assets would be understated.
Hi @ConnorM, so until the asset is disposed of, will it look like its value is overstated on the balance sheet? Since the depreciation is being recorded to Accumulated Depreciation and not the asset itself? Should we not look to the balance sheet to show the correct value of an asset and instead only use it for showing the value of the business as a whole? Just want to make sure I'm thinking about this correctly.
https://www.investopedia.com/terms/f/fully-depreciated-asset.asp