Buildings, machinery, equipment, furniture, fixtures, computers, cars, and trucks are examples of assets that will last for more than one year, but will not last indefinitely.
During each accounting period (year, quarter, month etc.) assets decline in value due to wear and tear. The value by which each asset declines is reported as a Depreciation expense in the profit & loss statement. In effect depreciation is the transfer of a portion of the asset’s cost from the balance sheet to the profit & loss statement during each year of the asset’s useful life.
The Fixed Assets module is used to track long-term assets and account for their acquisition, depreciation and disposal.