Introduction
Welcome to this comprehensive guide on how to use the Asset Depreciation feature in Empress. This guide is designed to help business users, like you, understand and interact with this feature effectively, without getting bogged down by technical jargon or complex processes.
Understanding Asset Depreciation in Empress
In any business, assets such as equipment, vehicles, or buildings lose their value over time. This is known as depreciation. Empress offers a powerful tool that automatically generates an Asset Depreciation Schedule based on your inputs. This schedule outlines how the value of an asset decreases over its useful life.
To enable this feature, simply check the Calculate Depreciation box when creating an asset record. You can also create multiple depreciation schedules for different Finance Books, offering you flexibility and precision in managing your assets.
Choosing the Right Depreciation Method
Empress supports multiple depreciation methods, each suitable for different scenarios:
Straight Line Method
This method depreciates the asset value evenly over its useful life. Empress also offers two options to adjust depreciation based on daily usage or shifts.
Double Declining Balance
Ideal for assets that lose value quickly in the beginning and slower later, this method is also known as the 200% declining balance method.
Written Down Value
With this method, you can set a specific rate of depreciation or let Empress calculate it based on the asset’s purchase amount, salvage value, and useful life.
Manual Method
For maximum control, you can manually edit the schedule dates and depreciation amounts for any period.
Managing Automatic Depreciation Entries
In Empress, you can automate the booking of depreciation entries. This feature automatically creates depreciation entries on the scheduled dates. If you prefer, you can create the Journal Entry manually by clicking the “Make Depreciation Entry” button in the corresponding Depreciation Schedule row.
Accounting for Depreciation
When a depreciation entry is made:
- The “Accumulated Depreciation Account” is credited
- The “Depreciation Expense Account” is debited
You can set these related accounts in the Asset Category or Company.
Visualizing Asset Value with Charts
For a clearer understanding and visualization of your assets’ net value over time, Empress provides a line graph. This graph displays the net value of the asset on different depreciation dates, giving you a snapshot of your assets’ value at a glance.
Conclusion
Understanding and managing asset depreciation is critical to the financial health of your business. By leveraging the Asset Depreciation feature in Empress, you can effectively track and manage the value of your assets over time. This guide provided a comprehensive overview of how to use this feature in Empress and its practical applications in everyday business operations. For more information or support, please refer to the Empress help resources or contact our support team.