How to use Fixed Assets in Inkle Books?

We built the Fixed Assets module to give startup founders clarity on long-term, tangible property that powers their business, like MacBooks for the team, office build-outs, servers and GPUs, and conference room AV.

Most founders struggle with:

• Tracking high-value purchases that should not be expensed all at once
• Calculating depreciation manually across spreadsheets
• Keeping the balance sheet aligned with the actual useful life of an asset
• Linking depreciation to the correct accounts in the General Ledger

Fixed Assets in Inkle Books fixes this by tracking each asset, its depreciation schedule, and its current book value automatically.

What is a Fixed Asset?

A fixed asset is a long-term, tangible piece of property a company owns and uses to run its business and generate revenue. Unlike inventory or supplies, fixed assets are not meant to be sold or consumed quickly. They are intended for use over several years.

Common examples include:

• Laptops, computers, and office equipment
• Furniture and fixtures
• Machinery and tools
• Vehicles
• Buildings and land

This is a tax requirement, not just an accounting choice. The IRS does not let US startups fully expense most fixed assets in the year of purchase. The cost has to be capitalised and recovered over several years through depreciation deductions on your federal and state returns. The standard tax method is MACRS (Modified Accelerated Cost Recovery System), which assigns each asset class a fixed recovery period, for example 5 years for computers and 7 years for office furniture.

Two exceptions every US startup should know about:

• Section 179 deduction: lets you immediately expense up to an annual cap (over $1M in 2025) on qualifying property like laptops, servers, and office equipment, instead of depreciating it over time.
• Bonus depreciation: lets you write off a large percentage of the cost of qualifying property in year one. The percentage phases down each year under current rules, so the benefit shrinks if you delay.

Either or both can meaningfully reduce your taxable income in the year of purchase, which matters when you are managing runway and trying to lower your federal and state tax bill. Your CPA picks the most beneficial method when filing.

What this means inside Inkle Books: the depreciation schedule you set up here drives your book depreciation, which shows up on your monthly P&L and balance sheet. Your tax depreciation can differ (often using MACRS, Section 179, or bonus depreciation), and your tax filer reconciles the two at year-end. Because your books and your tax workflow both live inside Inkle, nothing falls through the cracks.

The formula behind net book value is simple:

Net fixed assets = Total fixed assets − Accumulated depreciation

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What is Fixed Assets in Inkle Books?

Fixed Assets helps you record an asset once and let Inkle Books handle the rest, including depreciation schedules, journal entries, and the running book value.

It shows:

• The original purchase price
• The remaining useful life
• The current value (purchase price minus accumulated depreciation)
• The monthly depreciation value

This gives you a clean balance sheet and removes the need to maintain a separate depreciation register.

How do I add a Fixed Asset?

Step 1: Go to Inkle Books -> Accounting -> Fixed Assets

• Open Accounting from the left navigation
• Click Fixed Assets
• Click Add asset in the top right

Step 2: Fill in asset details

In the Add Fixed Asset dialog, enter:

• Asset name, for example Laptops, monitors, and computer equipment
• Description, a short note about the asset (optional)

Step 3: Set up depreciation

This is where Inkle Books calculates how the asset will lose value over time.

• Purchase price is the total amount paid for the asset
• Depreciation start date is the date depreciation should begin, usually the date the asset was put into use
• Salvage value is the estimated value of the asset at the end of its useful life
• Depreciation method: Straight line spreads depreciation evenly across the asset's life
• Useful life (in years) is how long the asset is expected to be productive
• Frequency of depreciation is how often depreciation entries should be posted, for example monthly

Step 4: Assign categories

Map the asset to the correct accounts in your Chart of Accounts so journal entries flow to the right places:

• Asset account is the balance sheet account where the asset is recorded, for example Computer Equipment
• Depreciation expense account is the P&L account where monthly depreciation is booked
• Accumulated depreciation account is the contra-asset account that tracks total depreciation to date
• Accumulated depreciation amount: only fill this in if the asset has already been depreciated before being added to Inkle Books

Step 5: Check schedule

• Click Check schedule to preview the month-by-month depreciation entries
• Review the schedule to confirm the start date, monthly amount, and end date are correct
• Save the asset

Once saved, Inkle Books will automatically post depreciation journal entries on the schedule you selected.

What do I see in the Fixed Assets list?

The Fixed Assets dashboard gives you a single view of every asset on your books.

For each asset you can see:

• Asset name is the label you assigned
• Remaining life is how many months of useful life are left
• Purchase price is the original cost
• Current value is the purchase price minus accumulated depreciation to date
• Depreciation value is the depreciation amount for the current period

You can search assets by name and export the full list using the Export option in the top right.

What is depreciation and why does it matter?

Depreciation is the accounting method used to spread the cost of a fixed asset across its useful life. Instead of taking a $10,000 hit on the P&L the month you buy a set of laptops, you recognise a portion of that cost each month over several years.

This matters because it:

• Keeps your monthly P&L accurate and comparable
• Aligns expenses with the period in which the asset actually generates value
• Ensures your balance sheet reflects the true book value of your assets
• Supports accurate tax filings, since depreciation is a deductible expense

Inkle Books uses the Straight line method by default, which divides the depreciable base (purchase price minus salvage value) evenly across the asset's useful life.

When should I add something as a Fixed Asset?

Add a purchase as a fixed asset when it is:

• Tangible and used in the operation of the business
• Expected to be used for more than a year
• Significant enough in value that expensing it in a single month would distort your P&L

Items like office snacks, software subscriptions, or low-value supplies should not be added as fixed assets. They belong in regular expense categories.

Why Fixed Assets matters

With the Fixed Assets module, you no longer need a separate spreadsheet to track depreciation, calculate book values, or remember to post monthly journal entries. Every fixed asset stays linked to your Chart of Accounts, your balance sheet stays accurate, and your P&L reflects the true cost of running the business each month.

Still have questions?

Reach out to our support team if you have any additional questions about using Fixed Assets in Inkle Books.