Handling Depreciation of equipment in contract service

Posted by Gary H. Lucas on January 17, 2008, 7:50 pm

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We build waste water treatment systems. Some jobs are contract service, we
retain ownership of the equipment and bill by the gallon. We need to
depreciate the equipment over a number of years. It has been suggested that
we create an assembly item for the different pieces of equipment, and
depreciate that. Some equipment like tanks are bought specifically for the
job and are not inventory items. What might be the best way to do this?
Can we put non-inventory items into an assembly to avoid the problem?

Thanks,

Gary H. Lucas

Posted by Allan Martin on January 18, 2008, 1:56 am

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> We build waste water treatment systems. Some jobs are contract service,

> we retain ownership of the equipment and bill by the gallon. We need to

> depreciate the equipment over a number of years. It has been suggested

> that we create an assembly item for the different pieces of equipment, and

> depreciate that. Some equipment like tanks are bought specifically for

> the job and are not inventory items. What might be the best way to do

> this? Can we put non-inventory items into an assembly to avoid the

> problem?

No, but what you should do is call your accountant and get some
professional advice.

> Thanks,

> Gary H. Lucas

Posted by Gary H. Lucas on January 18, 2008, 10:14 pm

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>> We build waste water treatment systems. Some jobs are contract service,

>> we retain ownership of the equipment and bill by the gallon. We need to

>> depreciate the equipment over a number of years. It has been suggested

>> that we create an assembly item for the different pieces of equipment,

>> and depreciate that. Some equipment like tanks are bought specifically

>> for the job and are not inventory items. What might be the best way to

>> do this? Can we put non-inventory items into an assembly to avoid the

>> problem?

> No, but what you should do is call your accountant and get some

> professional advice.

>> Thanks,

>> Gary H. Lucas

The accountants brought this issue to our attention. We are trying to
figure out how to solve it in QuickBooks.

Gary H. Lucas

Posted by Allan Martin on January 19, 2008, 10:14 am

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>>> We build waste water treatment systems. Some jobs are contract service,

>>> we retain ownership of the equipment and bill by the gallon. We need to

>>> depreciate the equipment over a number of years. It has been suggested

>>> that we create an assembly item for the different pieces of equipment,

>>> and depreciate that. Some equipment like tanks are bought specifically

>>> for the job and are not inventory items. What might be the best way to

>>> do this? Can we put non-inventory items into an assembly to avoid the

>>> problem?

>> No, but what you should do is call your accountant and get some

>> professional advice.

>>>

>>> Thanks,

>>>

>>> Gary H. Lucas

>>>

> The accountants brought this issue to our attention. We are trying to

> figure out how to solve it in QuickBooks.

Well you need more professioanal advice other than "you can't expense
systems that you build and retain ownership in, you must depreciate them".
Ask you accountant about making journal entires.

> Gary H. Lucas

Posted by Laura on January 19, 2008, 11:50 am

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>>>

>>>> We build waste water treatment systems. Some jobs are contract

>>>> service, we retain ownership of the equipment and bill by the gallon.

>>>> We need to depreciate the equipment over a number of years. It has

>>>> been suggested that we create an assembly item for the different pieces

>>>> of equipment, and depreciate that. Some equipment like tanks are

>>>> bought specifically for the job and are not inventory items. What

>>>> might be the best way to do this? Can we put non-inventory items into

>>>> an assembly to avoid the problem?

>>>

>>> No, but what you should do is call your accountant and get some

>>> professional advice.

>>>

>>>>

>>>> Thanks,

>>>>

>>>> Gary H. Lucas

>>>>

>> The accountants brought this issue to our attention. We are trying to

>> figure out how to solve it in QuickBooks.

> Well you need more professioanal advice other than "you can't expense

> systems that you build and retain ownership in, you must depreciate them".

> Ask you accountant about making journal entires.

I agree. When your accountant does how to do something in QB ask him/her to
provide you with the appropriate entry in journal entry format. Then you
should be able to figure it out in quickbooks.