Run depreciation on fixed assets

Run depreciation to reduce the book value of fixed assets and calculate tax and pool depreciation. An asset's depreciation amount depends on its purchase price or cost limit, and the details entered in its book value and tax value fields.

About running depreciation

  • You can run or roll back depreciation for up to one financial year at a time. If there are no assets to be depreciated in a period, you can still advance the current depreciation date by clicking Confirm.
  • The earliest date you can run depreciation from is your fixed asset start date. Any earlier depreciation can be manually entered against the relevant assets and account balances.
  • Depreciation is run on registered assets only, not draft, disposed or sold assets.

About tax and pool depreciation

  • Only book depreciation is posted to the accounts. Tax and pool depreciation is calculated and recorded against assets and pools, but is not posted to the accounts.
  • Pool depreciation is calculated in the last month of each financial year.
  • Xero will continue to calculate pool depreciation until the pool balance is zero. If you want to write off the pool balance before then, make a write-off adjustment.
  • You cannot run depreciation in the last month of a financial year if a pool balance is negative. You will need to review and adjust the pool balance before running depreciation.
  • If an asset has a cost limit both book and tax depreciation is calculated on the cost limit rather than purchase price. But whereas the book value of the asset is the purchase price less accumulated depreciation, the tax value of the asset is the cost limit less accumulated depreciation.

Run depreciation

You need the Adviser user role to run depreciation, and cannot run depreciation if an 'all users' lock date is dated in the depreciation period.
  1. Go to Accounts, then click Fixed Assets.
  2. Click Run Depreciation.
  3. Select the date you want to run depreciation to.
  4. Review the depreciation preview.
  5. Click Confirm.