How to Acquire & Depreciate Fixed Assets in Dynamics 365 Business Central
- Mike Palmieri
- Jul 15
- 3 min read
Learn how to acquire & depreciate fixed assets in your Microsoft Dynamics 365 Business Central solution.
Managing fixed assets in Microsoft Dynamics 365 Business Central ensures accurate tracking of asset values, compliance with accounting standards, and smooth financial reporting. In this step-by-step guide, you'll learn how to create, acquire, and depreciate fixed assets within Business Central.
Create a Fixed Asset
Start by navigating to Finance > Fixed Assets.
This will take you to the Fixed Assets list. Click New to create a new fixed asset record.
Fill in the required information such as:
No. – If auto-numbering is turned on, just tab out of the field and it will populate automatically.
Description – Enter a meaningful, descriptive name for the asset.
Fixed Asset Class Code – Choose a high-level classification like Machinery, Furniture, etc.
Fixed Asset Subclass Code – Select a subclass (e.g., Office Chairs, Wiring Equipment).
You may also wish to fill out other optional fields like:
FA Location Code – Useful for tracking where the asset physically resides.
Serial Number – Helpful for serialized items you want to track.
Note that the Class and subclass codes are editable lists that you maintain. Subclasses often assign a default FA Posting Group, which saves time and helps ensure consistency.
Configure Depreciation
Next, on the asset card, scroll to the Depreciation section and enter the Depreciation Method, Dates, and No. of Depreciation Years (for Straight line).
A quick note on depreciation methods: Straight line is most commonly used (and what we picked for this example). User-defined is a custom method. Manual is used if you do not want Business Central to automatically calculate depreciation. This is useful for assets like goodwill or other intangibles, which you might depreciate manually using journals at specific times, rather than monthly.
Optional: Customize the Depreciation Book View
Click Fixed Assets > Depreciation Books from the top menu.
If using methods like Declining Balance, you may need to unhide columns (e.g., Declining-Balance %) through personalization.You can also change depreciation to be based on number of months instead of years by customizing the column layout.
Acquire the Fixed Asset
You can acquire assets in two different ways, depending on how the cost is entered into your system.
Method 1: Acquire Using the "Acquire" Action
From the asset card, click Acquire.
This will take you through an acquisition process wizard.
In the pop-up, choose G/L Account for acquisition. Don’t use the other options in the dropdown unless you have a specific use case for them (like project-based acquisitions).
Use this method if:
You posted the vendor invoice to a prepaid or holding account.
You're taking on an existing asset already in your GL (e.g., at go-live).
If the asset already exists in your general ledger, your offset account should match the G/L account that the FA Posting Group posts to. This ensures it nets to zero and avoids duplicating the asset in your books.
In the next step, fill in the Amount and Acquisition Date.
Keep the toggle on if you want it to open the G/L journal automatically and click Finish.
Here you'll see a debit to the FA account and a credit to the same account.
Click Post.
Method 2: Acquire via Purchase Invoice
If you’re buying the asset directly from a vendor, use a standard purchase invoice.
Create a Purchase Invoice by navigating to Purchasing > Purchase Invoices.
Click New.
Fill in the required details here
Set Type to Fixed Asset.
In the No. field, select the asset you previously created.
Enter the Quantity (can be 1 or the actual count) and Cost (either unit or total cost)
Click Post to finalize.
Go back to the Fixed Asset Card to verify that the acquisition amount has been updated.
Calculate and Post Depreciation
To run depreciation for one or more assets, search for Calculate Depreciation using the search bar.
Then fill in the required details such as Depreciation Book and Depreciation Date.
It's important to note that it is best to use the last day of the month for the Depreciation Date. Avoid using mid-month dates (like July 14th), unless partial depreciation is expected. Otherwise, your depreciation might be calculated incorrectly.
Click OK once all the fields are correctly filled in. Business Central will create a journal, but won’t post it automatically. The system creates a general journal that you must review and post manually. This ensures accounting oversight before changes hit the GL.
Go to the journal it created, confirm the amounts and accounts. Click Post to finalize depreciation.
Training Video: How to Acquire & Depreciate Fixed Assets in Dynamics 365 Business Central
Get in touch with the Kwixand Solutions team if you have any questions about fixed assets or any other Dynamics 365 Business Central related enquiry. For more training videos, check out our Youtube channel.
