Over the course of its life, a company may acquire various types of (in)tangible assets, such as vehicles, machinery, buildings or ERP licences. Given the often high amounts spent, most companies use depreciation to smooth out the cost over several months/years. In Odoo, thanks to the creation of asset models, accounting entries are created automatically. With this tutorial, you'll be able to configure your asset depreciation without any problem. Let's get started!
Configuration
Knowing how to configure your depreciation will save you a great deal of time in the future, because once your asset model (a sort of depreciation model based on the asset) has been created, each purchase (of this type of asset) will be depreciated in the way you have previously configured. The first step in this configuration will be to create expense accounts that we will call (this is an expense account, i.e. a 6000 account) "Depreciation and value adjustment of items on (in)tangible fixed assets". Several accounts can be created depending on the type of fixed asset your company owns (vehicles, buildings, software). Creating these accounts couldn't be easier. Go to your chart of accounts, click on "New" in the top left-hand corner and create your account..
Next, you need to create an asset template. To do this, open the configuration tab of the accounting module and open the asset templates.
Clicking on "New" opens a new window. This is where you can define & set the depreciation method and the accounts to be charged.
Start by determining the name of your asset model. Then choose your depreciation method. Odoo offers you 3 possibilities:
- Straight-line: The total amount of the asset will be divided by the number of periods mentioned and will then be recorded as depreciation at that amount.
Advantage: the depreciated amount is identical for each period, which makes it easier to record.
- Declining balance: Based on a predefined rate, this rate will be used to calculate the amount of depreciation based on the residual value.
Advantage: This method allows fixed assets to be depreciated more quickly.
- Degressive then linear --> unclear
Once the depreciation method has been completed, it's time to fill in the depreciation and expense accounts. The depreciation account can correspond either to an Odoo default depreciation account (account 1500/1600/1700) or to a fixed asset account (also account 15/16/17). Finally, the expenditure account must correspond to a 4/5/6/7/8 account.
Once the asset model has been created, there are two final configurations to be made.
The penultimate thing to do is to define the desired automation of this asset (and those to come). To do this, all you have to do is open the depreciation account chosen in the template you created earlier:
-ensure that the account is recorded under "tangible fixed assets" (or other fixed assets)
- Choose the asset automation option
- The first is to do nothing, in which case Odoo creates no accounting entries.
- The second consists of creating a draft for each accounting entry (one for each depreciation period previously chosen in the asset model). Odoo will then warn you when the accounting entry needs to be validated.
- The last option allows Odoo to create the accounting entry and confirm it automatically. So you don't have to do anything yourself.
To close, the last configuration requires you to link the newly created asset model to the depreciation account you are working on above.
Use
When this configuration is complete, you can now post a supplier invoice with the account mentioned in the depreciation section of the asset model.
When you confirm your supplier invoice, a fixed asset is linked to the top right-hand corner of your invoice. When you open this asset, you will see our asset model applied to it.
A 'Depreciation table' tab is also available to view the accounting entries that will be posted as and when required, based on the duration configured in the asset model.
As the asset model requires future accounting documents to be created and validated, depreciation is already planned by the system and will be created and validated on the depreciation dates.
To enable companies to consult all their fixed assets in the same place, Odoo centralises them under a "fixed assets" heading in the accounting/fixtures module.
You are now ready to configure and manage all your fixed assets from Odoo and monitor them closely.
So how's life with Odoo?