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Capital assets in Wave

SystemSystem Posts: 412 admin

imageCapital assets in Wave

Capital assets are what your business owns that help you make money. This article will explain how to recognize a capital asset and enter it into Wave.
What defines a capital asset?

A capital asse...

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edited May 21, 2020 in Help Center Discussion

Comments

  • TODavid69TODavid69 Member Posts: 15
    If I purchase a business for $59,110 and if includes a Pisces of equipment that costs $1500. I paid 1/10 of the purchase as a down payment. How do I show this transaction in Wave? Would the Business itself be considered an Asset or only the $1500 piece of equipment?
  • ConnorMConnorM Member Posts: 1,229 ✭✭✭

    Hey @TODavid69! While we are able to tell you how to do something in Wave, we aren't able to necessarily tell you the right way of doing it when it comes to the principles of accounting.

    I would highly recommend reaching out to a registered CPA to ensure that you don't get incorrect advice on how to do your accounting.

  • DavadjeDavadje Member Posts: 2

    I bought a vehicle on credit. How do I record the monthly payments i.e under what expense category?

  • BarsinBarsin Member, Moderator Posts: 2,041 ✭✭✭

    Hey there @Davadje

    Check out this really thorough answer from our favourite accountant in the Wave community on Purchasing a vehicle in Wave

  • Don_KDon_K Member Posts: 1

    How would I add a rental property? The drop-down for "Liabilities" in the transaction section doesn't include long-term liabilities such as notes payable (mortgage)?

  • BarsinBarsin Member, Moderator Posts: 2,041 ✭✭✭

    Hey there @Don_K

    Some users create new businesses for their different rental properties! You have the option to Open Multiple Businesses within the same Wave account treating each one like a different project. This is another common workaround some of our users do, so you can switch between them with just a few clicks. This way you can create individual line items in your chart of accounts for each property.

    You could then run reports for each business as needed and manually add the totals but again, Wave is not explicitly designed for this.

    Check out these previous threads where some of our accountants have chimed in about how to setup mortgage accounts!

    https://community.waveapps.com/discussion/6260/loan-mortgage-bank-account-building
    https://community.waveapps.com/discussion/comment/38071#Comment_38071

  • RoBeCoRoBeCo Member Posts: 7

    How do I record $7500 worth of computer equipment that I had at the start of my business and am now using? What asset account do I use under the debit heading? I'm transferring personal equipment to my business.

    edited September 18, 2020
  • BarsinBarsin Member, Moderator Posts: 2,041 ✭✭✭

    Hey there @RoBeCo

    I believe this section of the help center article might help you.

    Head to Accounting > Transactions > More (top right corner), and then Add journal transaction.
    Add a description of the asset in the description field and select the date you are starting to use it in the business. Under the debit column, change the Category to the asset account, and enter the purchase amount or value of the asset.
    Under the credit column, make the Category Owner’s Investment / Drawings (if you're a sole proprietorship or partnership) or Loan from Shareholder (if you're a corporation), and enter the same amount.
    Click Save.

    Try using the property, plant, equipment asset account as your subheading in your chart of accounts!

  • RoBeCoRoBeCo Member Posts: 7

    Thanks, have it sorted out now

  • PatrixPatrix Member Posts: 3

    I bought a computer to use in my business. I have created a bill based on the vendor invoice and the bill has taxes.
    I have paid the bill. In my Balance Sheet under Long Term Assets I can see the value of the computer without taxes.
    In my Tax Report , if I expand to corresponding transactions I can see the tax paid for this asset as DEBIT.
    Is this correct? I thought I cannot reclaim sales tax if I don't resell the computer.

  • JulianPJulianP Member Posts: 1,002 ✭✭✭

    Hey @Patrix !

    Happy to bring some clarity to this. In general accounting for asset accounts, debits will be used to represent deposits into your account while credits will be used to represent withdrawals. For liability accounts (like credit cards), debits will be used to represent payments to the account while credits will be used to represent expenses.

    We also have a great Help Center article that sheds light on this. Feel free to check it out here:

  • PatrixPatrix Member Posts: 3

    Hi @JulianP ,
    Thank you, I know that, just wasn't sure if tax for capital asset was recoverable (in Canada).
    To answer my own question, I have learned from an accountant that taxes paid for capital assets such as my computer can be recovered because, by definition, the asset is used to produce revenue for the company.

  • Farmer_FrankFarmer_Frank Member Posts: 13

    If I purchased 7 assets at an auction to use in my business, would that be entered as 1 entry for the total dollar value? or should I break it out for each asset and the cost of that asset?

  • AlexLAlexL Member Posts: 2,869 ✭✭✭

    Hey @Farmer_Frank , full disclosure, I'm not an accountant or CPA so I'd highly recommend that reach out to one to ensure that this is being accounted for properly, but if I had to answer your question I would say that you should enter them separately as you may need to depreciate them at different rates in the future.

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