1) What You Will Learn (Fixed Asset Overview)

We will cover the main pieces of the fixed asset module in ERPNext: Asset Category, Asset, Location, Asset Movement, Asset Maintenance, Asset Repair, Asset Value Adjustment, Asset Capitalization, and the key reports such as Asset Depreciation Ledger and Asset Depreciations and Balances.

2) Asset Category – Depreciation Rules & Accounts

Concept

Asset Category defines how assets will be depreciated and which accounts are used. Each category can have its own useful life, depreciation frequency and method, and GL mappings.

Key Fields

• Asset Category Name – Office Furniture, Vehicles, IT Equipment, etc.
• Total Number of Depreciations and Frequency (monthly, yearly...).
• Depreciation Method – Straight Line or Written Down Value.
• Accounts – Asset account, accumulated depreciation, and depreciation expense.

3) Asset – Asset Master

Defining Assets

The Asset document represents an individual asset or a batch of identical units. It can be created from a Purchase Invoice / Purchase Receipt or as a manual entry.

Key Fields

• Asset Name / Asset Tag – unique code and descriptive name.
• Asset Category – pulls depreciation rules and accounts.
• Company, Location, Department, Custodian – for responsibility and reporting.
• Purchase Date, Gross Purchase Amount, Available for Use Date.
• Next Depreciation Date, Expected Value After Useful Life.

Asset Status

• Draft – before submission.
• Submitted – active asset, ready for depreciation.
• Partially / Fully Depreciated – based on the posted depreciation entries.
• Sold / Scrapped – once disposal is recorded.

4) Location & Asset Movement

Location

The Location master allows you to build a hierarchy of sites (building, floor, room, warehouse) and assign assets to each node, simplifying physical verification and maintenance visits.

Asset Movement

Asset Movement records transfers of assets between locations, departments, or custodians, keeping a history of who is responsible and where the asset is physically located.

5) Maintenance – Asset Maintenance & Repair

Asset Maintenance Team

Define internal or external teams responsible for handling maintenance requests and scheduled services.

Asset Maintenance & Asset Maintenance Log

Use Asset Maintenance to define preventive maintenance plans, and Asset Maintenance Log to record actual services performed with cost, notes, and next service dates.

Asset Repair

For major repairs that can impact asset value or remaining life, use Asset Repair. Afterwards, you may adjust value via Asset Value Adjustment or capitalize the cost.

6) Asset Value Adjustment & Asset Capitalization

Asset Value Adjustment

Use this document to adjust an asset’s book value (revaluation up or down, impairment, corrections). ERPNext will create the appropriate accounting entries between the asset account and the adjustment account.

Asset Capitalization

When you have expenses related to an asset that should be capitalized (e.g. major renovation, engine replacement), Asset Capitalization helps move the cost from an expense account to the asset account, then updates the depreciation base.

7) Depreciation & Reports

Running Depreciation

Depreciation entries can be generated periodically via the Asset Depreciation tools. The system posts Journal Entries that debit depreciation expense and credit accumulated depreciation automatically.

Key Reports

• Asset Depreciation Ledger: shows depreciation entries per asset and period.
• Asset Depreciations and Balances: lists original cost, accumulated depreciation, and net book value for each asset or category.
• Asset Maintenance: summarizes maintenance and repair costs by asset.
• Asset Activity: high-level log of purchases, movements, maintenance, and disposals.

8) Training Session Plan

Suggested order for workshops

1. Introduce fixed asset accounting concepts and map them to Asset Category setup.
2. Create sample assets from Purchase Invoices and via manual entries.
3. Configure Locations and run examples of Asset Movements.
4. Define maintenance plans and record actual work using Asset Maintenance and Asset Repair.
5. Run depreciation and review Asset Depreciation Ledger and Asset Depreciations and Balances.
6. Apply a revaluation or capitalization scenario and analyze the impact on book value and depreciation.