Fixed assets in Business Central track long-term assets such as machinery, vehicles, and equipment. Each asset has a card with classification and depreciation settings. Depreciation is calculated and posted through batch jobs, keeping the asset’s net book value current in the G/L.
Create a Fixed Asset
- Search for Fixed Assets using
Alt + Q. - Select New.
- On the Fixed Asset Card, fill in the following fields:
| Field | Description |
|---|---|
| No. | A unique identifier for the asset (e.g. FA-00010) |
| Description | The name of the asset (e.g. Delivery Van) |
| FA Class Code | Groups assets by class (e.g. TANGIBLE, INTANGIBLE) |
| FA Subclass Code | A more specific grouping within the class (e.g. VEHICLES, MACHINERY) |
| Location Code | Optional, the physical location of the asset |
| Responsible Employee | Optional, the person responsible for the asset |
FA Class and Subclass codes are set up under FA Classes and FA Subclasses, accessible from the search bar.
Set Up a Depreciation Book
A depreciation book defines the rules for how an asset depreciates. Most companies use at least one book that is integrated with the G/L.
- Search for Depreciation Books using
Alt + Q. - Select New.
- Fill in:
| Field | Description |
|---|---|
| Code | A short identifier (e.g. STRAIGHT) |
| Description | Descriptive name |
| Default Final Rounding Amount | Controls rounding on the last depreciation entry |
| G/L Integration, Depreciation | Check this to post depreciation to the G/L |
| G/L Integration, Acquisition Cost | Check this to post acquisitions to the G/L |
Common depreciation methods available in Business Central:
- Straight-Line, depreciates the asset by an equal amount each period over its useful life.
- Declining Balance, depreciates a fixed percentage of the remaining book value each period, resulting in higher charges early in the asset’s life.
- DB1/SL and DB2/SL, hybrid methods that switch to straight-line when it gives a higher charge.
- User-Defined, allows a custom depreciation table.
Assign the Depreciation Book to an Asset
- Open the Fixed Asset Card for the asset.
- Navigate to the Depreciation Books action, this opens the FA Depreciation Books page for that asset.
- Select New and set:
| Field | Description |
|---|---|
| Depreciation Book Code | Select the book you created (e.g. STRAIGHT) |
| Depreciation Method | Choose Straight-Line, Declining Balance, or another method |
| Depreciation Starting Date | The date depreciation begins |
| No. of Depreciation Years | For straight-line, the number of years over which the asset depreciates |
| FA Posting Group | Links the asset to G/L accounts for acquisition, depreciation, and disposal |
The FA Posting Group determines which G/L accounts receive acquisition cost postings, accumulated depreciation, and gain/loss on disposal. Set up FA Posting Groups under FA Posting Groups before assigning one here.
Post Acquisition Cost
There are two common ways to record the purchase of a fixed asset:
Option A, Fixed Asset G/L Journal:
- Search for Fixed Asset G/L Journals using
Alt + Q. - Enter a line with FA Posting Type set to Acquisition Cost.
- Set the Account No. to the fixed asset number, enter the acquisition amount, and set the balancing account (e.g. a bank or vendor account).
- Post with
F9.
Option B, Purchase Invoice:
- Create a purchase invoice for the vendor.
- On the invoice line, set Type to Fixed Asset and select the asset number.
- Set the FA Posting Type to Acquisition Cost on the line.
- Post the invoice. Business Central records the acquisition against the asset and credits the vendor.
Run Calculate Depreciation
Depreciation is not posted automatically. You run the Calculate Depreciation batch job at the end of each period.
- Search for Calculate Depreciation using
Alt + Q. - Set the following parameters:
| Field | Value |
|---|---|
| Depreciation Book Code | The book to calculate for |
| FA Posting Date | The period-end date |
| Posting Date | Usually the same as FA Posting Date |
| Document No. | A document number for the batch of depreciation entries |
| Insert Bal. Account | Check this to auto-insert the balancing G/L account |
- Select OK. Business Central generates journal lines in the Fixed Asset G/L Journal.
- Review the lines, then post with
F9.
After posting, each asset’s Book Value on the FA Depreciation Books page updates to reflect the accumulated depreciation.
For spreading costs across multiple periods rather than depreciating assets, see How to Use Deferrals in Business Central.