How to Record Monthly Depreciation on Office and Program Fixed Assets
Recording monthly depreciation across all fixed assets used by the NGO.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Program Expense: Depreciation | Expense (+) | 300.00 | - |
| Management & General: Depreciation | Expense (+) | 150.00 | - |
| Accumulated Depreciation | Contra-Asset (+) | - | 450.00 |
💡 Accountant's Note
Depreciation is allocated across functional categories based on how each asset is used. This ensures the Statement of Functional Expenses reflects the true cost of delivering programs versus running the organization.
Practitioner & Systems Framework
💻 ERP Architecture
Run the fixed asset depreciation module monthly. Ensure each asset profile is mapped to the correct functional department (Program vs. Management & General) so the ERP automatically splits the expense upon posting.
⚠️ Audit Flags
Auditors will review the fixed asset register and recalculate depreciation to ensure adherence to the NGO's capitalization policy and stated useful lives. Incorrect functional allocation of administrative assets to programs is a common audit finding.
📄 Required Documentation
Fixed asset register, monthly depreciation schedule, functional allocation mapping, and capitalization policy.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.