Fixed assets — vehicles, machinery, computers, furniture and buildings — are among the largest items on a Kenyan business's balance sheet. Yet the fixed asset register is one of the most commonly neglected accounting records. Assets are purchased but not added to the register. Depreciation is calculated incorrectly or inconsistently. Disposed assets remain on the books long after they have been scrapped or sold. Auditors regularly flag the fixed asset register as a material weakness.

Modern fixed asset management software automates the entire asset lifecycle — from purchase to disposal — and posts depreciation to the accounts automatically. This guide explains what a good system does and why it matters.

The Fixed Asset Lifecycle

Asset Acquisition

When a new asset is purchased, it should be added to the register at acquisition cost, with the supplier invoice as supporting documentation. Key details captured include: asset category, description, serial number, location, assigned department, purchase date and useful life.

For assets purchased through the procurement module, BetaSuite can create the asset register entry automatically from the approved supplier invoice — the purchase is categorised as a capital item rather than an expense, and the asset flows directly into the fixed asset register without manual re-entry.

Automatic Depreciation

Depreciation is the systematic allocation of an asset's cost over its useful life. BetaSuite supports:

  • Straight-line depreciation: Equal amount each year (most common for furniture, equipment)
  • Reducing balance depreciation: Higher charge in early years (KRA-preferred for tax purposes in Kenya)
  • Units of production: Based on usage rather than time (useful for machinery and vehicles)

The monthly depreciation run posts the charge to the correct expense account and reduces the net book value in the asset register automatically — no manual journal entries.

Asset Transfer and Location Tracking

When an asset moves from one branch to another or from one department to another, the transfer is recorded in the system. This ensures the asset register always reflects where each asset is physically located — essential for insurance purposes and internal audits.

Asset Disposal

When an asset is sold or scrapped, the disposal is recorded in the system. The profit or loss on disposal (sale proceeds minus net book value) is automatically calculated and posted to the income statement. The asset is removed from the register and no longer depreciated.

KRA Tax Depreciation

For income tax purposes, KRA prescribes specific depreciation rates under the Income Tax Act — these differ from the accounting depreciation rates used for financial reporting. BetaSuite maintains parallel depreciation calculations for both accounting and tax purposes, making the tax computation reconciliation straightforward at year-end.

Insurance Register

Insurance companies require an up-to-date asset register for property and equipment insurance. BetaSuite can export the asset register in the format required for insurance renewal — showing current replacement value and net book value by asset category.

Asset Audit and Physical Verification

BetaSuite supports periodic physical asset verification — comparing the system register against assets physically present. Assets found but not on the register are flagged for addition. Assets on the register but not found are flagged as potentially lost or stolen. The verification report supports the annual audit and insurance renewal.

Book a free accounting demo including fixed asset management at betasuiteapp.com/get-quote.