[Poll][Plugin] Automated Fixed Assets Depreciation

Hello everyone,

Recently I thought about the Account module of ERPNext, especially about the depreciation of fixed assets and automating the entries. Currently ERPNext doesn’t have a specific module or doctype for handling the depreciation using several methods and for automating the depreciation expense and accumulated depreciation entries other than the Journal Entry doctype that requires manual creation and calculation.

So I thought about creating a plugin that supports several depreciation methods and automate the depreciation journal entries but I want to know how useful such plugin is before I invest more time into its creation.

As mentioned below, instead of creating a plugin, the Asset module can be improved.

How would you rate the usefulness of an Automated Depreciation plugin for you?

  • 1- Extremely useful
  • 2- Very useful
  • 3- Somewhat useful
  • 4- Not useful

0 voters

Hi there,

I’m sure that ERPNext’s depreciation tools could be significantly improved, but it’s not accurate to say that depreciation entries have to be calculated and created manually. Are you familiar with the depreciation features of the asset doctype, and if so how will what you’re proposing be different from that?



@peterg I didn’t know about the existence of such tool. I will look into the source to see how it works and how it can be improved. Thanks for your suggestion.

@peterg Why are assets created in the Stock > Item doctype although there is an Asset > Asset doctype. Is it to be able to handle assets purchase and sell entries?

1 Like

@peterg Until now I have checked some of the source code of Asset module and I believe that there are several things that can be done:

  1. Removal of data related to the Asset doctype from the Item doctype, since both serve different purposes (Separation of Concerns)

Assets are properties, tangible and intangible, bought either to add value, of any form, to the business and will be held for at least one year.

Items are properties, tangible and intangible, bought for the purpose of reselling in a short period of time. They are considered as the core of the trading activity for the business.

  1. Removal of the fields item_name and item_code from the Asset doctype, since they are useless

  2. Supporting only the known methods of depreciation

Straight Line, Double-Declining Balance, Sum of The Year’s Digits, Units of Production and Modified Accelerated Cost Recovery System - For USA

These are merely suggestions and might not be the best thing to do.

Assets are Items, and they really have to be for many very common workflows to work. In other words, this…

…is not how ERPNext uses these terms. Items are abstract definitions, applied to anything that can be bought and sold. Assets, in contrast, are specific properties owned by your company. In schematic terms, Items are types and Assets are entities.

I don’t know much about how the Asset code is implemented in its specifics, but Items and Assets are not really separable concerns. Items define the entities that can be bought, sold, and/or depreciated (and, at different moments in a property’s lifecycle, often all three).

It is very common to purchase an item with a purchase order, turn it into a depreciating asset, and then sell it with a sales order a few years later. You might even buy ten things with a purchase order, sell nine of them as stock and keep the tenth as an asset. The Item doctype is the connection between these different events.

@peterg After a submitted my post, I thought about it in the same way you explained and I found out that they are the same in almost every aspect so separating them is not a good idea.

I will keep on digging into the source and I will get to you on the improvements I can find.

Thanks for your reply.