The Fixed Asset Schedule

Here is some key context on the reported items in the Fixed Asset Schedule:

Lifespan/ Useful Life:  This is the amount of time the asset is depreciated over.  Residential property is depreciated over a 27.5 year lifespan, and commercial property over 39 years.  Non-property fixed assets, such as appliances, often have shorter useful lives in the 5 to 7 year time range.

Date Placed in Service:  This is when the property was placed in service or when a capital improvement was completed.  Fixed assets are depreciated starting with their placed in service date, not the property purchase or project start date.  

You will take a prorated amount of depreciation in the year the asset was placed in service.  The amount of proration is determined by the month the asset was placed in service.  

Depreciable Basis: This is the portion of your total asset basis that is eligible to be depreciated.  Buildings, Improvements, Capitalized Closing Costs, Capital Improvements, etc. all contribute to the depreciable basis of an asset.

Non-Depreciable Basis: This is the portion of your total asset basis that is not eligible to be depreciated.  This is primarily applicable to property fixed assets, as Land is not depreciable.  The non-depreciable basis will not impact your depreciation expenses but is tracked for proper calculation of capital gains whenever the property is sold.  

Accumulated Depreciation: This is the total of depreciation entries made for the asset. It reduced the asset value on your books.  

Book Value: The book value of the asset is the depreciable basis plus the non-depreciable basis less any accumulated depreciation. The book value of an asset will decline over time as depreciation accumulates and is not the same as the asset's market value. The remaining depreciable basis is the depreciable basis less any accumulated depreciation.

Recommended Depreciation: This is a calculated value based on the information provided. Depreciation is calculated on a straight line basis over the usable life of the asset.  If the Date Placed in Service has been filled out and it was in the reporting period, the amount will be prorated based on the mid-month convention.  If no Date Placed in Service has been entered, or if the asset was placed in service prior to the reporting period, the full amount will be displayed. If no useful life was provided, no depreciation recommendation is given. Some assets may be eligible for accelerated or bonus depreciation; check with your tax advisor.

Depreciation expenses are not automatically booked on your behalf. 

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