Asset problems: creating from a purchase, selling, scrapping and status
This page answers frequent problems with fixed assets in ERPNext: creating assets from a purchase, entering
existing assets, selling or scrapping, a status that looks wrong, and Asset Capitalization or Asset Repair
errors. For depreciation, see Why is my asset depreciation not what I expect?.
Creating assets from a Purchase Receipt or Invoice
For an item with Is Fixed Asset ticked and an Asset Category:
- With Auto create assets on purchase on the item, submitting the Purchase Receipt (or Purchase Invoice with
Update Stock) creates draft assets, one per unit (or one for the row, with Create Grouped Asset on the
item). Open each
asset, check it, and submit it. - Otherwise, create the Asset yourself and select the Purchase Receipt or Purchase Invoice.
If the receipt fails with an account error, set Asset Received But Not Billed in the Company's Fixed Asset
Defaults, and the accounts on the Asset Category for this company. With Capital Work In Progress
accounting, also set the category's Capital Work In Progress Account.
The asset's purchase date comes from the linked receipt's or invoice's posting date.
Existing assets (opening balances)
For assets bought before you started using ERPNext:
- Create the Asset with Asset Type = Existing Asset. No purchase document is needed.
- Enter the gross amount, Opening Accumulated Depreciation and Opening Number of Booked Depreciations.
- Submit. The asset itself posts no accounting entry.
- Post the opening balances of the fixed asset and accumulated depreciation accounts with your opening
Journal Entry, as for other accounts.
Do not post an opening Journal Entry to the Capital Work In Progress account for existing assets: ERPNext does
not move it to the asset later.
Selling or scrapping
- Sell: on the submitted asset, click Sell Asset (or make a Sales Invoice with the asset on an item row).
The invoice removes the asset's gross value and accumulated depreciation, and posts the gain or loss to the
company's Gain/Loss Account on Asset Disposal. A Sales Order or Delivery Note is not needed. - Scrap: click Scrap Asset. A Journal Entry removes the asset and posts the remaining value as a loss.
Depreciation is posted up to the sale or scrap date first, so the GL shows a debit to Accumulated Depreciation
and a credit to the Fixed Asset account, plus the gain or loss. A scrapped asset can be brought back with Restore Asset.
The status looks wrong
| Status | Meaning |
|---|---|
| Draft | Not submitted (assets created from a receipt start here) |
| Work In Progress | A composite asset not yet capitalized |
| Submitted | Submitted, no depreciation yet |
| Partially Depreciated | Some depreciation posted |
| Fully Depreciated | Value has reached the salvage value |
| Sold / Scrapped | Disposed |
For an imported asset, the status depends on the posted entries and the salvage value. If all depreciation is
posted but the status is Partially Depreciated, check that the value after depreciation equals the Salvage
Value of the default finance book.
Composite assets and Asset Capitalization
A Composite Asset collects costs (stock items, services, other assets) through Asset Capitalization:
- Create the asset with Asset Type = Composite Asset. Its status is Work In Progress.
- Make an Asset Capitalization that consumes the stock items and assets, and adds service costs.
- Submit it. The composite asset gets its value and can be depreciated.
If the Asset Capitalization does not submit:
- Fill every mandatory accounting dimension in the item rows too, not only in the header.
- For stock items, the warehouse must have stock at the posting date and time.
- An item reconciled with a Stock Reconciliation just before can give a debit and credit mismatch; update the
site, then try again.
A composite asset cannot be split. To split an ordinary asset with several units, use Split Asset.
Asset Repair
- The Asset list shows only submitted assets of the company.
- The Purchase Invoice list shows only invoices for the repair's company that have the repair expense.
- The repair cost is taken from the invoice's net total, without tax. If the GST is ineligible for input tax
credit, add it to the repair cost yourself.