An asset category groups fixed assets by kind, vehicles, machinery, IT equipment, fixtures, for organisation and reporting. It keeps the asset register tidy and lets you report depreciation and value by class of asset.
What you will learn
- What a category is for
- How it differs from a stock category
- Where the accounting actually lives
How it behaves
A category is a simple grouping: a name, a description and the assets within it. You use it to organise the register and to slice reporting, so you can see motor vehicles apart from office equipment.
Note, and a contrast with stock. Unlike the stock category, an asset category does not itself carry accounting ledgers. The asset, depreciation-expense and accumulated-depreciation ledgers are set per asset, not on the category. In practice assets in the same category usually share the same ledgers, but you wire them on each asset, so the category stays purely organisational.
Good practice
- Use categories for reporting structure, grouping like assets together.
- Wire ledgers on the asset, keeping them consistent within a category by convention.
Related
- Reference: Assets
- Reference: Stock Category (which does carry a ledger)