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.