---
title: "Purchasing an Asset"
space: "ERPNext"
url: "https://docs.frappe.io/erpnext/purchasing-an-asset"
updated: "2026-02-26"
---

**Purchasing an asset in ERPNext involves creating the asset record, optionally automating asset creation from a purchase, and following the purchase and accounting cycle.**

Assets can be purchased manually or automatically created when receiving an item in a Purchase Receipt or Purchase Invoice. This ensures accurate asset tracking and proper accounting entries.

## 1. Prerequisites

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Before purchasing a new asset, ensure the following are configured:

- **[Asset Category](https://docs.frappe.io/erpnext/user/manual/en/asset-category)** is created
- [Item](https://docs.frappe.io/erpnext/user/manual/en/item) is created with **‘Is Fixed Asset’** enabled
- Optional: Enable **‘Auto Create Assets on Purchase’** in the item master if you want assets to be created automatically upon receipt

![](/files/Screenshot 2026-01-11 at 11.49.39 PM.png)
*Item Master*

## 2. How to Purchase an Asset

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1. Follow the standard purchase cycle for the asset:
  - Create a Purchase Order (if required)
  - Receive the item via Purchase Receipt
  - Submit a Purchase Invoice
2. Enter the asset location in the Items table of the Purchase Receipt or Purchase Invoice.
3. On submission of the Purchase Receipt:
  - If Auto Create Assets is enabled, ERPNext will automatically create the Asset record.
  - You can then update other details manually in the Asset form.

![Auto create asset on purchase](/files/Screenshot%202025-05-21%20at%2012.04.07%E2%80%AFAM.png)

### 2.1 Accounting Entries

1. With Capital Work in Progress (CWIP) Enabled
  - On submitting the Purchase Receipt, the CWIP account is debited instead of the asset account.
  - This represents that the asset is purchased but not yet available for use.
  - When the asset becomes available for use, CWIP is credited, and the corresponding asset account is debited.
2. With CWIP Disabled
  - The receipt entry is posted directly to the asset accounts defined in the Asset Category.
3. Temporary Liability Account
  - ERPNext uses **“Asset Received But Not Billed”** (a liability account) when submitting a Purchase Receipt.
  - On submitting the Purchase Invoice, this account is debited/reversed.

![](/files/Screenshot 2026-01-11 at 11.55.53 PM.png)

## 3. Related Topics

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1. [Purchase Receipt](https://docs.frappe.io/erpnext/user/manual/en/purchase-receipt)
2. [Purchase Invoice](https://docs.frappe.io/erpnext/user/manual/en/purchase-invoice)