Capital Assets report

This article explains how to access and understand the Capital Assets report in FreeAgent. It also explains how FreeAgent calculates the depreciation of assets and how to export the report.

Navigate to the ‘Accounting’ tab at the top of the screen and select ‘Reports’ from the drop-down menu.

Select ‘Capital Assets’ in the ‘Breakdown’ section.

The report will show each capital asset that your business has bought, listed at its net book value. The net book value is the price (excluding VAT) minus depreciation.

Asset depreciation

The first month's or year’s worth of depreciation is posted on the day the asset was bought, because an asset immediately loses part of its value when it is no longer brand new. FreeAgent uses monthly as the default frequency for depreciation for any new assets you buy after 6th March 2024. If you’d prefer the asset to depreciate on a yearly basis, you can update the depreciation frequency for an asset.

FreeAgent will then work out each asset’s depreciation each month or year, based on whether the straight line or reducing balance method was selected when recording the asset purchase. Please note that whilst the depreciation will be calculated to seven decimal points in the accounts, the depreciation percentage that you’ll see in the report will be rounded to two decimal points. This means that the percentage shown in the report may be slightly different to the actual percentage calculated in the accounts.

If you have a limited company account type, FreeAgent will also work out the capital allowances you can claim against your Corporation Tax bill. If you have a sole trader account type, FreeAgent will calculate the capital allowances you can claim on your Self-Assessment tax return.

Straight line depreciation

When you choose the straight line method, the depreciation is calculated by dividing the asset's original cost by the asset life, which is the number of years it’s expected to provide value to the business.

The asset will be fully depreciated once the asset's life has ended.

Reducing balance depreciation

When you choose the reducing balance method of depreciation, the depreciation is calculated each month or year by multiplying the net book value of the asset by the depreciation rate entered when recording the asset purchase. This means that the asset will depreciate more when it’s new, and less as it ages.

You may notice that each month or year’s depreciation percentage is a figure you don’t recognise. This is the depreciation shown as a percentage of the original cost.

Updating the depreciation frequency of an asset

If you’d like to update how frequently the depreciation is calculated for an asset, select ‘Edit asset details’ at the bottom of the ‘Asset details’ panel.

Choose whether you’d like the asset’s depreciation to be calculated on a ‘Monthly’ or ‘Yearly’ basis and select ‘Update asset details’ to complete the process.

Exporting the Capital Assets report

To export the Capital Assets report, select ‘Export report’ and then choose either ‘CSV’ or 'PDF’ from the drop-down menu.