Simple/Smart Fixed Asset Handling in QuickBooks - Part 4

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This article is the 4th in a series introducing a new method for handling fixed assets in QuickBooks desktop editions. In this part we will look at issues associated with 'reporting' when using this new methodology. For more details on implementing the methodology, refer to the author's textbook, Simple/Smart Fixed Asset Handling in QuickBooks, by Mark Wilsdorf. You will also find more information in the earlier published articles in this series:

For Part One of this series, click here.

For Part Two of this series, click here.

For Part Three of this series, click here.

Reports and Other Fixed Asset Information Sources

A benefit of having a detailed list of fixed assets maintained in QuickBooks is that it gives you quick, easy access to all details about any asset via the Items List in the Inventory Center (available in Premier editions and higher), or by drilling down in a report. You can find out an asset's purchase and sale dates and amounts, notes you may have entered for the asset, what other assets may have been traded in for it, and more—things you might expect to get from using the Fixed Asset Item type but cannot, unless you have Intuit's Fixed Asset Manager software.

* Drilling down means double-clicking a line in a report to open a window containing expanded detail, such as a list of transactions.

Let's look at some of the reports you can create in QuickBooks, with the Simple/Smart (S/S) method.

Item QuickReport

Getting a QuickReport for an asset's main Item will show all transactions involving the asset, as well as its current book value.

You can open a QuickReport from the Item List window by clicking on the desired Item, then either typing Ctrl-Q or selecting Reports > QuickReport from the button menu at the bottom of the window. After the report opens, if you customize it to include the Amount column, it will then show amounts for all of the asset's transactions. (If you customize the report, Memorizing it for later re-use would be a good idea.)

You can also open a QuickReport for a higher-parent-level Item. For instance, to see details for all assets in the Machinery & Vehicles category, you could open a QuickReport for the Fx:Ma Item (Fixed Assets:Machinery & Vehicles).

Fixed Asset Book Values Report

This report shows each asset's current book value (original basis less accumulated depreciation), or $0 for assets which have been sold or traded in. Both the Ford FD250 2015 pickup 136 and Dodge pickup 267 were either sold or traded off prior to preparing this report:

By the way, the S/S method provides a way to "retire" Items which represent assets the business no longer owns. Retiring the Items removes them from the list of active assets so they will no longer appear in reports, but keeps their detail available in case you ever want to see it.

The Fixed Asset Book Values Report is a customized version of QuickBooks' Custom Summary Report (we don't have space to explore the customizations here). Because several customizations are involved, the report should be Memorized after it is set up, so you can recreate it by selecting it from the Memorized Reports list, with just a couple mouse clicks.

Fixed Asset Purchases & Trade-Ins Report

This report is usually created only once a year, for providing a list of fixed asset purchases and trade-ins to whoever prepares the business' income taxes. (A report showing fixed asset sales will be described in the next topic.)

Like the Fixed Asset Book Values report, several customization steps are involved; so again, this is a report which should be Memorized the first time you create it, so thereafter you can recreate it by selecting it from the Memorized Reports list.

This is the only S/S report which requires a bit of interpretation to understand:

  • Assets which have a positive Basis amount were purchased during the tax year.
  • Assets which have a negative Basis amount were traded in during the tax year.

Assets which have no Basis line (only an Accum Depr line) were neither purchased nor traded-in during the tax year; only depreciation expense was recorded for them.

Fixed Asset Outright Sales Report

This report is also usually created only once a year for income tax preparation purposes, and also should be Memorized to avoid repeating the customization steps in the future. As the title says, this report lists assets which were sold outright (not traded in) during the tax year. This example report lists just one asset, so apparently it was the only fixed asset sold outright during the year:

Other Reports?

The book, Simple/Smart Fixed Asset Handling in QuickBooks warns that only certain reports should be used for getting fixed asset information. Why? Because the S/S method's unique Item setup makes Items behave differently from Inventory Part Items which have been set up in the standard way, for inventories. For example, the Inventory Valuation report should not be used as fixed asset book values. Instead, use the Fixed Asset Book Values report described earlier.

Coming in Part 5...

In the final installment of this article series we will explore a way to automate depreciation calculations and import depreciation expense transactions into QuickBooks, avoiding some of the manual work of making depreciation entries.

About the Author

Mark Wilsdorf has worked with QuickBooks users in agriculture since the 1980s. He was editor of AgriComp, the first national magazine for agricultural computing, has authored books about using QuickBooks in agriculture (The QuickBooks Farm Accounting Cookbook™ series), has done consulting work for Fortune-500 businesses serving agriculture, and has been the lead developer on several software projects for developing QuickBooks add-ons. He currently writes an agriculture-oriented QuickBooks blog at QBAgCenter.com.

For proof that Mark always has at least one foot in agriculture, you might look around his office at home.... there you would find things like a folder of soil test reports, calf obstetrical supplies, a seed sample waiting on a germination test, a stack of machinery parts catalogs... and a lariat that he will never learn to use really well.

But, beyond agriculture, Mark is just a 'really smart guy,' as this new series is certain to prove to those of you who have not read as much of his stuff as I have. Over the next several weeks as we cover his installments in this new series, you should get quite a few ideas about his treatment of 'fixed assets' in ways you may have never given them thought before.