what is assest capitalization
entry in tally
Capitalization of fixed assets is done through the General Accounting (System 09). This method, similar to the voucher entry method, allows the user to update all tables (General Ledger and Fixed Assets: F0911, F0902, and F1202).
A fixed asset is defined as an item that has physical substance and a life in excess of one year. It is bought for use in the operation of the business and is not intended for resale to customers. Fixed assets are usually referred to as property, plant, and equipment.
The capitalization of Fixed Assets is the process where you enter accounting entries for a fixed asset in order to make it available for depreciation. Basically, this process adds costs to fixed assets by debiting cost accounts.
There are different ways of capitalizing fixed assets:
You can process entries directly into the Beginning Balances in the Fixed Asset module. These entries do not update the Account Balances Table (F0902).
You can capitalize assets is through a voucher entry transaction in Accounts Payable.
The following summarizes the process for capitalizing fixed assets in the Fixed Assets module.
Create a journal entry debiting an asset cost account and crediting a bank (cash) account.
Post the journal entry batch. The system updates the G/L Posted Code (POST) field in F0911 and creates Account Balances (F0902) records.
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