Fixed Assets¶
Last reviewed: 2026-03-31 · Nnamdi
Status: Complete
Route: /fixed-assets → /fixed-assets/new → /fixed-assets/:id
1. What is it?¶
Fixed Assets are long-term physical or intangible items a business owns and uses to generate income — buildings, vehicles, computers, furniture, equipment. Unlike expenses (consumed immediately), fixed assets are capitalised on the Balance Sheet and their cost is spread over their useful life through depreciation. Finora tracks each asset, calculates depreciation automatically, and posts the accounting entries.
2. How does it work in Finora?¶
2.1 The fixed assets list (/fixed-assets)¶
Header actions: - Add Asset — opens the new asset form
KPI summary cards: | Card | What it shows | |------|--------------| | Total Asset Value | Total purchase price of all active assets | | Accumulated Depreciation | Total depreciation posted to date across all active assets | | Total Assets | Count of all assets (active + disposed) |
Search and filter: - Search bar: searches by asset name - Status filter: All Statuses / Active / Disposed / Fully Depreciated / Under Construction - Category filter: All / Land / Buildings / Machinery / Equipment / Vehicles / Furniture & Fixtures / Computers & IT Equipment / Software / Other Assets
2.2 Adding a new fixed asset¶
Navigate to /fixed-assets/new. Sections:
Basic Information: | Field | Required | Notes | |-------|----------|-------| | Asset Name | Yes | Descriptive name, e.g. "Dell Laptop — Finance Dept" | | Asset Account (COA) | Yes | The Balance Sheet asset account this item sits in. Options are pre-populated from the COA (school-specific accounts shown for this business): 1100 School Buildings, 1110 Furniture & Equipment - Classrooms, 1111 Furniture & Equipment - Lab, 1112 Computers & Technology, 1113 Library Books, 1114 Sports Equipment, 1120 Vehicles - School Buses, 1130 Generators & Power Equipment | | Description | No | Optional additional detail |
Accounting Setup: | Field | Required | Notes | |-------|----------|-------| | Accumulated Depreciation Account | Yes | Contra-asset account. Default: 1200 Accumulated Depreciation | | Depreciation Expense Account | Yes | P&L expense account. Default: 6080 Depreciation |
Financial Details: | Field | Required | Notes | |-------|----------|-------| | Purchase Price | Yes | The full cost paid to acquire the asset | | Purchase Date | Yes | Defaults to today | | Salvage Value | Yes | Estimated residual value at end of useful life. Defaults to 0 |
Depreciation Settings: | Field | Required | Notes | |-------|----------|-------| | Depreciation Method | Yes | Straight-Line (default) or Declining Balance | | Useful Life (Years) | Yes | Number of years the asset will be in use. Default: 5 |
Straight-Line: Annual depreciation = (Purchase Price − Salvage Value) ÷ Useful Life Declining Balance: Higher depreciation in early years, reducing each year by a fixed percentage of book value
Additional Details (optional): - Serial Number, Location, Manufacturer, Model
Action buttons: - Cancel — returns to list - Save as Draft — saves without posting to GL - Create Asset — creates the asset record and posts the initial acquisition entry to the GL
2.3 Asset lifecycle and GL entries¶
On asset purchase (Create Asset): | Account | Debit | Credit | |---------|-------|--------| | 1110 Furniture & Equipment (or whichever asset account) | Purchase Price | — | | 1010/1020 Cash / Bank | — | Purchase Price |
Monthly/annual depreciation: | Account | Debit | Credit | |---------|-------|--------| | 6080 Depreciation (Expense) | Depreciation charge | — | | 1200 Accumulated Depreciation (Contra-asset) | — | Depreciation charge |
The Net Book Value = Purchase Price − Accumulated Depreciation (shown on the Balance Sheet).
On disposal: | Account | Debit | Credit | |---------|-------|--------| | Cash/Bank (proceeds received) | Proceeds | — | | 1200 Accumulated Depreciation | Total depreciation to date | — | | 6500 Loss on Disposal (if sold below book value) | Loss amount | — | | 1110 Fixed Asset Account | — | Original purchase price | | Gain on Disposal (if sold above book value) | — | Gain amount |
2.4 Asset statuses¶
| Status | Meaning |
|---|---|
| Active | Asset is in use, depreciation running |
| Disposed | Asset sold, scrapped, or written off |
| Fully Depreciated | Accumulated depreciation = Purchase Price − Salvage Value; no further charges |
| Under Construction | Capital work in progress — not yet in service, depreciation not yet started |
3. Business rules & constraints¶
| Rule | Detail |
|---|---|
| Asset must be linked to a COA asset account | The asset account determines how it appears on the Balance Sheet |
| Depreciation posts automatically | Finora calculates and posts depreciation based on the method and useful life; no manual entry needed |
| Salvage Value reduces depreciation base | Total depreciable amount = Purchase Price − Salvage Value |
| Straight-Line is the most common method | Best for assets that depreciate evenly (buildings, furniture). Declining balance suits technology assets that lose value quickly |
| Disposal removes asset from active list | A disposal entry reverses the asset and accumulated depreciation accounts |
| Draft assets do not post to GL | Only "Create Asset" records the acquisition entry |
4. Nigerian regulatory context¶
Capital Allowances vs Accounting Depreciation - FIRS does not accept accounting depreciation as a deductible expense for CIT purposes - Instead, FIRS requires businesses to claim Capital Allowances at prescribed rates: - Industrial buildings: Initial allowance 15%, Annual 10% - Plant & machinery: Initial 50%, Annual 25% - Motor vehicles: Initial 50%, Annual 25% - Furniture & fittings: Initial 25%, Annual 20% - Computers: Initial 50%, Annual 25% - The depreciation in Finora's accounts is for accounting (IFRS/GAAP) purposes; the tax computation (CIT Computations page) handles capital allowance separately - Businesses should not confuse accounting depreciation figures with their tax capital allowance claims
Asset disposal and CGT - Selling a fixed asset may trigger Capital Gains Tax (CGT) - CGT is 10% of the gain (proceeds − original cost) in Nigeria - A disposal at a gain must be reported — see CGT Computations (Tax Management)
Schools and assets - Schools typically have significant fixed assets: buildings, buses, lab equipment, computers - Proper fixed asset tracking supports the Balance Sheet and helps quantify the school's net asset value for regulatory reporting to WAEC, NECO, or state education boards
5. Common customer questions¶
Q: "What is depreciation and why does Finora charge it automatically?"
Depreciation spreads the cost of a long-lived asset over its useful life instead of expensing the full purchase price upfront. For example, a ₦500,000 laptop with a 5-year life is depreciated at ₦100,000/year under straight-line. Each year, Finora records ₦100,000 as an expense and reduces the asset's book value on the Balance Sheet.
Q: "My asset is fully paid for but the expense only shows as small monthly charges — where's the rest?"
The cash payment is on the bank/cash account (from when you purchased it). The P&L shows only the depreciation charge each period — not the full purchase price. The full purchase price is on the Balance Sheet as a fixed asset. This is correct accounting.
Q: "Can I change the depreciation method after creating an asset?"
Contact Tier 3. Changing depreciation methodology on an active asset mid-life requires manual adjustments to the accumulated depreciation account.
Q: "I sold an asset. How do I record it?"
Open the asset detail page and use the Dispose action. Enter the disposal date and proceeds received. Finora will calculate the gain or loss and post the disposal entry. If the disposal triggers CGT, file it via Tax Management → CGT Computations.
Q: "The depreciation on my books is different from what my accountant says for tax."
This is expected. Finora's depreciation is for accounting purposes only. For tax, FIRS uses Capital Allowances at different rates (e.g. 50% initial + 25% annual for plant & machinery). Your accountant calculates capital allowances separately, usually in the CIT Computation.
6. Known edge cases¶
Asset purchase funded by a loan¶
If the asset was financed by a loan (not paid upfront), the acquisition entry should credit Loans Payable rather than Cash. The current form assumes cash/bank payment — for loan-funded assets, the GL adjustment may need Tier 3 assistance.
Assets with partial-year depreciation¶
If an asset is purchased mid-year, the first year's depreciation should be pro-rated. Finora's depreciation calculation may or may not pro-rate automatically — confirm with Tier 3 if the first-year charge looks incorrect.
Under Construction assets¶
Assets under construction (capital work in progress) should not depreciate until they are placed in service. Set status to "Under Construction" to hold depreciation. Reclassify to Active when the asset is ready for use.
No inventory of assets at business start¶
Businesses that are already operating when they first use Finora must enter their existing assets at current book value (original cost with the accumulated depreciation already deducted), not original purchase price — otherwise depreciation will be overstated going forward.
7. Escalation trigger¶
Escalate to Tier 3 (Founder) if: - Depreciation is not posting correctly (wrong amount, wrong accounts) - Asset disposal produced an incorrect GL entry - Business needs to change a depreciation method mid-asset-life - Balance Sheet asset values do not reconcile with the asset register
Escalate to Tier 2 (Support Lead) if: - Business has a large number of existing assets to import - Business unsure which depreciation method to use for a specific asset type - Business asking about the difference between accounting depreciation and tax capital allowances
8. Last reviewed¶
2026-03-31 — Nnamdi. Verified against production. Fixed Assets list confirmed (empty — no assets yet). Add Fixed Asset form fully captured: Basic Information, Accounting Setup (depreciation accounts), Financial Details (purchase price, salvage value), Depreciation Settings (Straight-Line/Declining Balance, useful life), Additional Details. COA asset accounts confirmed (school-specific): 1100–1130.