Asset Categories and How Depreciation Is Calculated
Categories hold default useful life, depreciation method and salvage percent; depreciation is monthly, straight line or reducing balance, and never goes below salvage.
For School administrators, Accountants, Directors and proprietors. Updated 2026-10-09.
Overview
On Fixed Assets > Categories users with the “add fixed asset” permission can Add category and users with the “edit fixed asset” permission can Edit or Remove. A category has a Name, Useful life, Depreciation method (Straight line or Reducing balance) and Salvage percent (0 to 100). Names must be unique ("There is already a category with that name.").
A category with assets cannot be removed ("Assets are filed under this category. Move them first."), so Remove is disabled while the count is above zero. Changing a category affects new assets only. Depreciation rules: Straight line charges (cost minus salvage) divided by useful life in months every month, with the final month taking the remainder.
Reducing balance charges 2 divided by the life in months of the book value at the start of the month (double the straight-line rate) and never goes below salvage value. An asset bought part-way through a month starts depreciating the following month. Only In use, Idle and Under repair assets depreciate; Lost and Disposed assets do not.
Depreciation stops when book value reaches salvage value. The asset drawer shows a depreciation schedule: posted months with a tick and greyed projected months. Cost, date, life, method and category are locked once depreciation or a purchase journal exists; then only name, location, custodian and notes can change.
Before you start
- The “view fixed asset” permission to view categories
- The “add fixed asset” permission or the “edit fixed asset” permission to change them
Steps
- Open Fixed Assets > Categories
- Select Add category and enter name, useful life, method and salvage percent
- Use Edit to adjust defaults for future assets
- Open an asset from the Register to see its depreciation schedule
Common problems
I cannot change the cost of an asset
Once depreciation is posted or the purchase is in the books, cost, date, category and depreciation settings are fixed. Only details such as name, location, custodian and notes can be edited.
Remove is disabled on a category
Assets are filed under it. Move or edit those assets first.
An asset stopped depreciating
Book value has reached salvage value, or the asset status is Lost or Disposed.