This topic introduces concepts related to fixed asset depreciation in Q360.

Note: The decisions you make from this document are reflected in your optional Fixed Assets import workbook, as well as your Trial Balance import and front-end configuration of deprecation methods and fixed assets in Q360.

Depreciation in Q360

Q360 can be configured to automatically depreciate any number of fixed assets as part of the month-end closing process. If this is not configured, you may continue depreciating your fixed assets manually.

GL accounts

By default, Q360 uses two key GL accounts defined at the entity level. The Accumulated Depreciation asset account and the Default Depreciation expense account. Through supplemental reporting, you can obtain details of accumulated depreciation and book value of all fixed assets.

Refer to Account Lookup Rules document for more information on options for overriding the Default Depreciation expense account. Also note the Accumulated Depreciation account cannot be overridden and is defined once at the entity level and used for all types of fixed assets.

Configuration

Q360 supports creating custom depreciation rules with desired number of periods based on any of the following standard methods of depreciation:

• Straight Line (SL)
• Double Declining Balance (DDB)
• Modified Accelerated Cost Recovery System (MACRS)

Each individual fixed asset can be linked to a rule you create to depreciate it over a desired number of accounting periods.

Trigger

Q360 provides a single command called Run Asset Depreciation that you can run during your month-end closing procedures to post depreciation expense entries for all configured fixed assets at once.

Reporting and reconciliation

Q360 includes the detailed Month End Fixed Asset Sub-Ledger report that breaks down purchase cost, book value, and depreciation expense of each fixed asset. Additionally, the system automatically reconciles book value of fixed assets (tracked in your entity-designated Fixed Assets account) to this subledger. Under normal circumstances, Q360 ensures these two sides are always reconciled. However, if a discrepancy is spotted, it may indicate an underlying issue such as a manual journal entry that was posted to increase or decrease the control Fixed Assets account, which is not supported by an actual depreciation journal entry.