Fixed assets (also called property, plant and equipment) are long-term tangible assets used in your business operations that are not expected to be sold within 12 months.
Fixed assets are the physical resources your business uses to operate - they are not held for sale but for use in generating revenue. Common fixed assets include land, buildings, vehicles, machinery, equipment, furniture and computer hardware. Fixed assets are recorded on the balance sheet at their cost (or revalued amount) and depreciated over their useful life. The asset register is the record that tracks all fixed assets, including their acquisition date, cost, depreciation method, useful life, accumulated depreciation and current book value. When you dispose of a fixed asset (through sale, trade-in or scrapping), you need to record the disposal and recognise any gain or loss. Proper fixed asset management is important for accurate financial reporting, insurance coverage and tax compliance. SortBooks correctly identifies capital purchases and ensures they are recorded as fixed assets in Xero rather than being incorrectly expensed.
SortBooks helps with the bookkeeping behind fixed assets by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing fixed assets by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Depreciation is the accounting method of allocating the cost of a tangible asset over its useful life. It reduces taxable income each year and reflects the asset's declining value.
Capital expenditure is money spent on acquiring or improving long-term assets like equipment, property or vehicles. Unlike operating expenses, CapEx is not fully deducted in the year of purchase but depreciated over time.
An asset is anything of value that your business owns or controls. Assets are listed on the balance sheet and include cash, receivables, inventory, equipment, property and intangible items.
The balance sheet is a financial statement that shows your business's assets, liabilities and equity at a specific point in time. It follows the equation: Assets = Liabilities + Equity.
An asset register is a detailed record of all fixed assets owned by a business, including purchase date, cost, depreciation method, accumulated depreciation and current book value.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.