Asset Capitalization

Asset Capitalization is the process of converting a purchase or work-in-progress into a fixed asset on your balance sheet. Instead of expensing the full cost, it is capitalized and depreciated over time.

Creating an Asset via Capitalization

From Purchase Invoice

1. Receive the asset item via Purchase Invoice (or Purchase Receipt).
2. Click Create > Asset from the Purchase Invoice.
3. The Asset record is created with:

- Purchase Date: Date of the invoice

- Gross Purchase Amount: Invoice amount

- Asset Category: Default from the item

- Supplier: From the invoice

1. Complete asset details and Submit.

From Capital Work in Progress (CWIP)

For assets under construction:

1. Costs accumulate in the Capital Work in Progress account via Purchase Invoices and Journal Entries.
2. When the asset is ready for use, go to Asset > Asset Capitalization.
3. Select the CWIP account items.
4. The system creates the Asset and moves the CWIP balance to the Fixed Asset account.
5. Depreciation begins from the capitalization date.

Asset Master Fields

Asset Status

Asset Reports

• Asset Register: List of all assets with values
• Asset Depreciation Ledger: Depreciation history per asset
• Asset Depreciation Schedule: Future depreciation schedule
• Asset Movement Report: Location and custodian changes

Related Topics

• Asset Category
• Asset Depreciation
• Purchase Invoice