Important Accounting Dates for Fixed Assets
There are three critical dates for each individual fixed asset. These dates establish when the asset was acquired, placed in service, and the start of depreciation. These three dates are listed below:
- Acquisition Date – the date the asset was purchased.
- Service Date – IRS rules define when an asset is placed in service and depreciation of the asset may begin. An asset is considered to be placed in service when it is first put into a condition or state of readiness and availability for a specifically assigned function.
- Depreciation Date – the date used to begin calculating depreciation. This is usually the same as the Service Date, but can be different. Most organizations will also use the same depreciation date for all of their schedules. Others will sometimes use a different starting date for Tax versus Internal Financial Book.
In addition to the asset dates, there are several dates that impact the actual calculated values. These dates can be changed to match your current, past or future accounting period or periods.
- Tax Year – determined by the ending date for the calendar tax year. For many organizations this will be December 31, but others will end their year in different months.
- Current Accounting Period – determined by the beginning and ending dates of the depreciation period. The accounting period may for one or more periods or a full year.
A very important calculation concept is the “as of” date. When running reports, the “as of” date is the close of a particular accounting period. This will impact the calculated values of Prior, Current, Total Depreciation and Net Book Value for each asset as explained below:
- Prior Accumulated Depreciation – the amount of accumulated depreciation before the current accounting period.
- Current Period Depreciation – the amount of depreciation calculated for the current accounting period.
- Total Depreciation – the sum of prior accumulated and current period depreciation.
- Net Book Balance – the unamortized balance through the Depreciation Period End date. This is calculated by subtracting total depreciation from the cost basis.