Moving Asset from Stock Item to Fixed Asset Item

Question:

We have added Asset Item as a Stock / consumable Item. How to move this item to Fixed Asset register, so that Depreciation can be applied on it?

Answer:

Please follow the steps given below to have stock item moved to fixed asset item.

Stocking Out Consumable Item

1. Create a Stock Entry of type Material Issue

2. Select Items, with respective Source Warehouse, where stock of item is available

3. For an item, select "Stock Adjustment" as a Difference Account.

On submission of this Stock Entry, the item in question will be completely stock-out from your Warehouse. Also, the item's valuation will be debited in the Stock Adjustment Account.

Adding Item as Fixed Asset Item

1. Create a New Asset from Assets > New
2. In the Asset master, select Item and enter relevant details
3. Select "Is Existing Asset" as Yes.

And then again, to update fixed asset account, you have to pass a Journal Entry where you can debit the Fixed Asset account and credit the Stock adjustment account.