Moving Asset from Stock Item to Fixed Asset Item

Question: Asset Item has been added as a stock or consumable item. How may depreciation be applied to this item if it is moved to the fixed asset register?

Answer: To have a stock item converted to a fixed asset item, please follow the instructions below.

Stocking Out Consumable Item

1. Publish a Stock Entry of the Material Issue category.
2. Select Items, with respective Source Warehouse, where stock of item is available
3. Choose "Stock Adjustment" as a Difference Account for an item.

The item in question will be completely out of stock in your warehouse at the time this stock entry is submitted. The Stock Adjustment Account will also be debited for the item's valuation.

Adding Item as Fixed Asset Item

1. From Assets > New, create a new asset.
2. Select Item in the Asset master and fill in the necessary information.
3. "Is Existing Asset" should be set to Yes.

Additionally, you must make a journal entry that debits the Fixed Asset account and credits the Stock adjustment account in order to amend the Fixed Asset account.