Managing Equipment Records
Office and related equipment must be tracked and managed. Keep an accurate and up-to-date list of permanent equipment used in your consulting services business. Be especially careful to keep track of equipment that is useful for a year or longer and is of appreciable value. Equipment records should show the date the item was purchased, the name of the seller, a description of item, the check number of payment(s), and the amount of purchase including tax. If you own a number of items, keep a separate list for vehicles, computers and printers, and office furniture and fixtures. From these records you will develop a depreciation worksheet and provide supporting information for fixed asset accounts.
Remember, a calendar year is twelve consecutive months beginning January 1 and ending December 31. A fiscal year is twelve consecutive months ending on the last day of any month other than December. A short tax year is less than twelve months because your firm was not in business a full year or you have changed your tax year.
A charge to expenses should be made to cover depreciation of all fixed assets except land. Fixed assets are any item you purchase to use in your business for a year or longer. Examples are buildings, vehicles, equipment, furniture, and office fixtures. Smaller businesses will usually change depreciation at the end of their fiscal year, but if your business grows and you have major fixed assets, you or your accountant may decide to calculate depreciation monthly.
