Depreciation and disposal

Depreciation in Verasol is a monthly step that a person runs, or that Vera prepares for a person to post: Verasol does not post it on its own. Each run books one entry per asset for each month, on the last day of the month, and brings the register and the ledger forward together. Before you close a month, run its depreciation: a period cannot be closed while depreciation is missing or waiting as a draft.

How depreciation is calculated#

Each asset has a depreciation method, a useful life and a salvage value (from its category, or set on the asset). Every month Verasol works on what is left to depreciate: the cost, less the depreciation so far, less the salvage value.

• The first month is charged in full, whatever the day the asset was placed in service. No depreciation is charged in the month of disposal.
• The last month of the life takes what is left, so the asset ends exactly at its salvage value and becomes Fully depreciated.
• A change of life, salvage value or method applies from the next month on; earlier months stay as they were.

For example, a vehicle costing AED 118,000.00 with a salvage value of AED 17,700.00 over 5 years is depreciated by (118,000.00 − 17,700.00) ÷ 60 = AED 1,671.67 a month.

Run the monthly depreciation#

1. Open Fixed Assets › Depreciation.
2. Under Run Monthly Depreciation, choose the Year and the Month.
3. Leave 1 Post to the books now ticked to post straight away, or untick it to create drafts you check first.
4. Click 2 Run Depreciation.

Verasol depreciates every asset in use up to and including the month you chose, filling in earlier months that were missed first. The Monthly Depreciation Summary shows each month's Assets Posted, Posted Depreciation and Drafts:

• 3 Details lists each asset's opening value, depreciation, closing value and journal entry; click the entry number to open it.
• Post posts a month's drafts, and any earlier ones, in order.
• 4 Reverse takes a month out: drafts are discarded, and posted entries get a reversing entry. You can then run the month again.

Verasol refuses a month in the future, and a month in a closed period. When earlier months are in a closed period, their depreciation is added to the first open month, with a note. A month cannot be reversed when a later month is depreciated or when the asset was disposed of, revalued, improved or moved to another category after it.

Assets depreciated by units of production#

An asset depreciated by units of production needs the units it produced in the month. Give it its Total Expected Units on the Depreciation tab of the asset (the units it should produce over its life, for example machine hours or kilometres).

When such assets are in use, Run Monthly Depreciation lists them under Units produced in the month, with the Units so far of each one. Enter the Units this month of each asset as a whole number before you click Run Depreciation:

• An asset you leave empty is left out of the run, and the result names it. An asset with 0 units gets no depreciation for the month.
• Only the month you run is depreciated for these assets: a month you did not run counts as a month without production, and earlier months are not filled in. For the same reason, closing a period does not wait for them.
• Before a disposal, a revaluation or a move, Verasol does not bring these assets up to date by itself: run their depreciation first.

What Verasol books#

For September 2026, the vehicle in the example above got this entry, dated 30 September 2026:

The expense account is the category's, or the standard Depreciation Expense account; the credit goes to the category's accumulated depreciation account.

Dispose of an asset#

When you sell, scrap, donate or lose an asset, record its disposal so it leaves the register and the books.

1. On the Assets tab, click Dispose on the asset's row (an asset that is in use or fully depreciated).
2. Enter the Disposal Date and choose the Reason: Sold, Scrapped, Lost / Stolen, Donated or Transferred out.
3. For a sale, answer How was it sold?:
   • Paid into a bank account: enter the Proceeds (excl. VAT), the VAT on the sale (5% of the proceeds, or none for a zero-rated or exempt sale) and the bank account the money was received in.
   • On a sales invoice (sale on credit, with its tax invoice): choose the issued invoice and its line. The invoice already booked the receivable and the VAT.
4. Add notes if you like and click Dispose Asset.

Verasol first brings the depreciation up to the month before the disposal. Then the cost and the accumulated depreciation leave the books, and the difference between the proceeds (without VAT) and the net book value is the gain or loss on disposal.

What Verasol books#

A van with a cost of AED 98,000.00 and accumulated depreciation of AED 88,200.00 (net book value AED 9,800.00) was sold for AED 14,500.00 plus VAT on a sales invoice. Verasol posted a gain of AED 4,700.00:

When the proceeds are paid into a bank instead, the bank is debited with the proceeds and the VAT, and the VAT is credited to VAT Output. A sale below the net book value debits Loss on Disposal of Assets instead of crediting a gain.

Cancel a disposal#

Open the disposed asset (filter the Assets tab on Disposed) and click Cancel disposal. Verasol reverses the disposal entry and the asset returns to the register as it was. The depreciation brought up to date at the disposal stays.

Revalue, move or improve an asset#

From the asset's row or window:

• Revalue books a new carrying amount (fair value) on a date, with the valuer and the report reference. An increase first reverses earlier revaluation losses on the asset, and the rest goes to the revaluation surplus; a decrease first uses the asset's surplus, and the rest is a loss.
• Move / reclassify moves the asset to another location, or another category. A new category with different accounts moves the cost and the accumulated depreciation with an entry; a new location alone books nothing.
• Record maintenance or improvement logs a repair or service. When the work adds to the asset (Add to the asset's cost), it is capitalised and can extend the useful life.

Before a revaluation, a move to a category with other accounts, or work added to the cost, Verasol brings the depreciation up to the month before.

Check the register against the ledger#

The Reports tab shows the assets by category and by status, and Register vs. Ledger: for each asset account and accumulated depreciation account, the register total, the ledger balance and any difference. A difference means an amount is in those accounts without an asset in the register, for example a purchase bill line booked to an asset account (the bill then shows Fixed assets not registered).

1 Register vs. Ledger compares the register with your accounts. Under Generate Reports, each Export Excel downloads a file that opens in Excel:

• 2 Fixed Asset Register: every asset with its details (category, location, serial, tag and purchase order numbers, insurance), its cost, accumulated depreciation and book value, and the total of the assets in the books.
• 3 Depreciation Schedule: the depreciation still to book, per asset and in total per month: the drafts waiting, then the next 12 months, as the monthly run works them out. Assets depreciated by units of production are listed without amounts, as they depend on the units produced.
• 4 Asset Movement Report: for the period you choose with From and To, each fixed asset account's balance at the start, its additions, improvements, revaluations, reclassifications, depreciation and disposals, and its balance at the end, taken from the posted journal entries.

Related#

• Register fixed assets
• Closing periods
• Sales invoices
• Journal entries
• Financial statements