Fixed Asset Register Template

Set a capitalization threshold before you add anything. A purchase at or below it is expensed, however long it lasts, and long-lived purchases above it go on the register. In the US, the IRS de minimis safe harbor lets a business deduct items costing up to $2,500 per invoice or item¹. With an applicable financial statement, such as audited financial statements, the limit is $5,000.

The safe harbor covers only amounts you also expense in your books, under a policy in place at the start of the tax year. You elect it each year with a statement attached to your return. For a small business without audited statements, a $2,500 book threshold keeps your books and your tax return in step.

Write the threshold and a useful life for each category into your accounting policy manual, so the decision doesn't change with whoever opens the invoice.

Give every asset the same columns, so anyone can check a row without asking you. US federal grant rules make a useful floor. Records for grant-funded equipment must include a description, a serial or other ID number, acquisition date and cost, location and condition, and any disposal date and sale price².

An asset's cost is everything you paid to get it working. The IRS counts sales tax, freight, and installation and testing³ in the cost of property you buy. For your books, the OpenStax accounting textbook from Rice University says the cost to depreciate includes all costs that prepare the asset for use⁴.

These costs often arrive separately. Freight comes on a carrier's bill and installation on a contractor's, sometimes weeks later, and either can end up coded to expenses. Before you add an asset, collect every invoice for work done before it went into service, whenever the bill arrives.

After that date, routine repairs and maintenance are expenses. Work that improves the asset, such as extending its life or adding capacity, is capitalized. Give it its own row and in-service date, since the IRS treats an improvement as separate depreciable property⁵.

Start depreciating when the asset is placed in service. In the IRS's words, that's when it is ready and available for a specific use⁵, even if you haven't used it yet. A machine delivered in December but not installed and working until January is placed in service in January.

Straight-line depreciation spreads cost minus salvage value evenly over the useful life. Set one life per category, such as 10 years for machinery and 5 for vehicles, and one rule for partial months, then apply both to every asset.

Your tax return follows different rules. MACRS, the IRS system for most business property placed in service after 1986⁵, treats office furniture as 7-year property and trucks as 5-year property. Section 179 and the special depreciation allowance let you deduct much or all of a qualifying asset's cost in its first year. Keep tax depreciation on its own schedule.

1. 1

   Add the month's new assets

   Enter everything that went into service, with every invoice behind its cost.

2. 2

   Post depreciation

   Run the month for every asset in service, and stop each one at its salvage value.

3. 3

   Record disposals

   Remove anything sold or scrapped in the same month, with its gain or loss.

4. 4

   Compare two balances

   Check the register's total cost against the ledger's fixed asset accounts, and its accumulated depreciation against the ledger's.

Compare cost and accumulated depreciation separately, not just net book value. In the router example, expensing the freight and installation leaves the ledger's cost $6,000 low and its accumulated depreciation another $50 behind each month. Netted, the two errors partly cancel and look like one smaller gap with no obvious cause.

Fix both together: move the $6,000 out of expense and into the asset account, then post the depreciation you missed. Make this check a fixed step in your month-end close.

Records drift. Equipment gets moved, lent out or scrapped, and nobody updates the register. The Government Accountability Office's internal control standards for federal agencies describe periodically counting vulnerable assets, equipment included, and comparing them to control records⁶ as a common physical control.

Count at least once a year, in both directions: find every asset on the register, then walk the floor for equipment that isn't on it. If you bought equipment with a federal grant, the rules require a physical inventory, reconciled with your records, at least once every two years².

When an asset is sold, the OpenStax textbook says to record its depreciation up to the date of sale⁷ first. Then compare the proceeds with net book value: above it is a gain, below it a loss. Remove the cost and accumulated depreciation together, and keep the approval with the row.

For a faster start, open this template in River: it builds the register from your invoices and checks the totals against your ledger balances. Once the register ties, a balance sheet reconciliation shows your accountant or auditor the evidence behind the balance.