Asset Management – Automating Depreciation with the Straight Line Method ©

? Overview:
The Asset Management feature in QNE AI Cloud Accounting is designed to help users easily manage and automate asset depreciation calculations. This feature uses the Straight Line Method, where the depreciation formula is:

(Asset Cost – Residual Value) ÷ Useful Life of Asset

Depreciation is calculated on a monthly basis. Once the asset records and depreciation settings are properly configured, users simply click the "Run Depreciation" button, and the system will automatically generate the corresponding depreciation journal entries.

⚠ Note: This feature is only suitable for users applying the Straight Line Method. If your depreciation is calculated using a different method, this feature may not be applicable.

? Scenario:
Example:
ABC Sdn. Bhd. purchased office equipment for RM 12,000 with a residual value of RM 2,000 and a useful life of 5 years. After setting up the asset details in QNE AI Cloud Accounting and configuring the depreciation method:

1. The system calculates monthly depreciation as:

   (RM 12,000 – RM 2,000) ÷ (5 years × 12 months) = RM 166.67 per month

2. At the end of each month, the user clicks "Run Depreciation".

3. The system automatically creates the journal entry:

   • Debit: Depreciation Expense – RM 166.67

   • Credit: Accumulated Depreciation – RM 166.67

This process eliminates manual calculations, ensures accuracy, and keeps financial records updated.

Solution:

Step 1 - Please complete the configuration in Assets and Depreciation with Depreciation Expense Account.

i. Expand Fixed Assets > Press Assets and Depreciation.

ii. Press Add to create Asset Depreciation, Select Fixed Asset Account, Depreciation Account, and Depreciation Expense Account.

Step 2 - Expand Fixed Assets > Press Asset Management

Step 3 - Press Add.

Step 4 - user can refer configuration below, and note below.

• Asset Type = Refers to the configuration made by the user in the Assets and Depreciation settings.

• Serial Number = An optional field for users to enter the serial number of the fixed asset.

• Purchase Price = The purchase cost of the fixed asset.

• Purchase Date = The date the fixed asset was purchased (Optional).

• Asset Name = The name of the fixed asset.

• Depreciation Start Date = The date when depreciation officially begins.

• Depreciation Method = Straight Line (Monthly). Currently, this is the only option available.

• Useful Life = The useful life span of the fixed asset. For example, if set to 10, it means 10 years. The system will automatically multiply by 12, resulting in a total of 120 months.

• Residual Value = The estimated remaining value of the asset at the end of its useful life after full depreciation. It represents the amount you expect to recover through sale, scrap, or other means, and it is not depreciated further.

• Partially Depreciation = Since this feature is newly added, if the asset has already been depreciated previously, users can enter the total value already depreciated here. The system will calculate the remaining asset value by subtracting this amount from the purchase price.

• Last Depreciation Date = Allows users to manually select when depreciation should start. For example, if set to 01/01/2025, the system will start calculating depreciation from 01/02/2025.

Step 5 - Press Save, after configured above, system will prelisted the result at bottom table.

Step 6 - Press Run Depreciation, if user wants to generate Journal Entries, then Press OK

Step 7 - Users can drill down to the Journal Entries by clicking the Reference column in the bottom table. 

Step 8 - after zoom in the journal, below is the Journal Result

Done.

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