Representing assets that vary over time Follow

 

While most Asset entries in your forecast will involve a one-time purchase amount, there are cases where you might need to show subsequent purchases that increase the value of the asset over time.

Let's use this example: Let's say you're buying a piece of machinery for your business. Let's say you buy the base machine for $15,000, and this is your initial Asset purchase. A few months later, you spend another $3000 on a major attachment to increase the machinery's functionality.

It's the same asset, but the value of that asset is changing over time.

 

 

Varying assets that won't be re-sold

If you're creating an Asset entry with varying amounts, and it won't be re-sold during the course of your forecast, then you can use a single entry. We'll use the example above to illustrate - we're spending twice for the asset: a $15,000 initial purchase, and a later $3000 upgrade.

To show the two separate purchase amounts from the example above in the same Asset entry, you would use the Varying Amounts over time input, as shown below: 

varying-amount-asset1.gif

After this step, you'd configure the useful life of the asset so that depreciation can be calculated correctly as the overall value changes. For more details on entering assets, please see Entering Asset purchases.

Note: Depreciation will be calculated on each payment separately, using its start date. Since each payment happens on a different date, each one will have a slightly different "useful life" span, so the depreciation calculation will be slightly different based on that.
Note: Keep in mind that if you're making payments on a loan you've taken in order to buy the asset, those payments aren't represented here. Those payments would be instead part of a Loan entry in the Financing page of your forecast.

 

Varying assets that will be re-sold

If you then want to show your asset being re-sold during the course of your forecast, the process is a bit different. In this case, we'll use a separate entry for each segment of the asset purchase.

Using the same example from above, this process would result in two entries on the Assets page: one for the initial machinery purchase of $15,000, and one for the upgrade purchase of $3000, as shown below:

varying-assets4.png 

Note: for details on entering an Asset, please see this page.

Each entry should be set to the same type (Current or Long Term), and each one should be set for the same useful life span. Usually, this means setting the same length of useful life for both entries. In some cases where the asset purchases happen many months apart, you may need to set a different useful life for each. The most important criteria is that both asset entries have a useful life that ends at the same time:

varying-asset2.png

 

In addition, you'll need to set both asset entries as being re-sold. Set each one to be sold in the same future month:

varying-asset3.png

Note: You can set the re-sale value of both asset entries to the amount you plan to sell them for.

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