Our company has just bought a new computer, Office Home & Business to go on it, Sage 50 software and had Sage do some data conversion to migrate some product information onto Sage. Are all these costs capital, so should be posted to 0030 Office Equipment? If these are all capital, should they just stay in Office Equipment, or should I set up some new codes for Hardware and Software? If so, which codes would you recommend I use, and would I need to set up new depreciation codes too?
You can use 0030 Office Equipment for the cost of the asset. Software could be recorded as a fixed asset or an overhead, depending on cost and the life of the product. If you intend to upgrade the software annually there is no need to capitalise it. You might also want to refer to your standard policy for capitalising assets - there is usually a threshold cost to use as a guide. Alternatively, you might want to use a separate code for Computer Assets, in which case you could add another 2 nominal codes in the range starting 00XX eg 0050 for cost and 0051 for Depreciation. If you add new nominal codes, make sure they are included in your Chart of Accounts.
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Sheelagh Lyons Bookkeeping Clarity Making Bookkeeping Clearer
The answers I provide are meant as a general guide only and do not constitute advice.
