Fixed Assets & Depreciation
A capital purchase that never gets capitalized correctly is a recurring audit finding. Yukti tracks assets from purchase through disposal, with depreciation running on schedule automatically.
How Yukti Handles This
Purchase invoices can create the asset record directly
- A qualifying purchase invoice can create an asset record directly
- Carries purchase cost, useful life, and depreciation method assigned by category
- Generates the full depreciation board and posts each period's entry automatically, no manual calculation
Depreciation method is assigned at the category level
- Straight-line spreads the same expense evenly, the default for office equipment and furniture
- Declining balance is accelerated, applying a fixed percentage to remaining book value each period
- Matches how vehicles, machinery, and hardware lose value; assigned at the category level for consistency
Disposals post the gain or loss automatically
- Disposal compares net book value, cost minus accumulated depreciation, against sale or write-off value
- Removes accumulated depreciation and closes out the book value automatically
- Posts the resulting gain or loss the moment disposal is recorded, no ghost assets on the register
Accounting and physical tracking share one asset record
- This page covers accounting and depreciation specifically
- Asset Management covers physical tracking, maintenance schedules, and employee assignment
- A shared underlying asset record keeps the accounting and operational views from drifting apart
Where This Connects to the Rest of Your Books
Assets often start as a purchase order or vendor bill
- Most capital purchases begin as a purchase order or vendor bill in Purchase
- A qualifying invoice creates the asset record directly, carrying over vendor, cost, and date
Inventory tracks where an asset physically lives
- Inventory tracks an asset's warehouse or site, assignment, and serial or tag number
- Accounting and physical records point at the same asset
- A mismatch, like a fully depreciated laptop still checked out, becomes visible, not hidden
The ledger keeps depreciation and disposals in sync
- Depreciation schedules post their periodic journal entry automatically each period
- Disposals post accumulated-depreciation removal and gain or loss recognition the moment recorded
- Automatic posting keeps the fixed asset register and trial balance in agreement
Where the AI agent helps
The agent reviews incoming purchase invoices against your capitalization policy, a dollar threshold, a category of goods.
Flags purchases that look capitalizable but were coded straight to expense
Catches the kind of missed capitalization a year-end audit usually finds
Surfaces the exception before it becomes an audit finding
See What This Could Save Your Team
Fixed asset tracking and depreciation
You could save ~2.7 hours/month
Common Questions
Which depreciation methods does Yukti support?
Straight-line and declining balance are the two most commonly used, assignable per asset category so every asset in that category depreciates the same way by default. Straight-line spreads the expense evenly across the useful life; declining balance is accelerated, applying a fixed percentage to the remaining book value each period so the expense front-loads into the earlier years. You can also configure other methods and adjust the depreciation board for an individual asset when its actual usage pattern doesn't match the category default.
What happens when I sell or scrap an asset before it's fully depreciated?
Recording the disposal calculates the asset's net book value at that point, original cost minus accumulated depreciation to date, and compares it against the sale proceeds or write-off value. Yukti posts the resulting gain or loss on disposal automatically, removes the accumulated depreciation, and closes the asset out of the active register in the same entry, so there's no separate manual journal entry to remember.
Can I track an asset's physical location separately from its depreciation schedule?
Yes. The accounting record (cost, depreciation method, book value) and the physical record (location, assignment, condition) live on the same underlying asset, connected through Inventory and Asset Management, so moving an asset between sites or reassigning it to a different employee doesn't touch its depreciation schedule, and the two views never fall out of sync with each other.
How does Yukti decide when a purchase should become a capitalized asset instead of an expense?
Capitalization rules are configured by you, typically a dollar threshold combined with a category of goods, and applied at the purchase invoice stage. When a bill matches the policy, Yukti can create the asset record directly from that invoice. The AI agent also reviews incoming purchase invoices against the same policy and flags ones that look like they should have been capitalized but were coded straight to an expense account, which is the exact error most year-end audits catch after the fact.
What happens if I need to revise an asset's useful life partway through its depreciation schedule?
You can adjust the remaining useful life or the depreciation method on an existing asset, and Yukti recalculates the remaining depreciation board from that point forward based on the asset's current net book value, rather than requiring you to void and recreate the asset record. Depreciation already posted in prior periods stays as recorded; only the schedule going forward changes.
See Fixed Assets & Depreciation in Yukti
Get a walkthrough of how Yukti handles your books, or compare plans to see what is included in the free community edition.