Inventory Depreciation
Record periodic write-downs of inventory or other assets using transactions between the asset, depreciation expense, and accumulated depreciation accounts.
This guide shows a periodic asset write-down flow in Bkper. Whether you apply it to inventory obsolescence or another depreciating asset, you record periodic transactions that move value from the asset into a depreciation expense account, with an accumulated depreciation account reflecting the total reduction.
The accounts
Set up your chart of accounts with the relevant asset, liability, and expense accounts to capture the full depreciation cycle.
The transactions
Receive inventory
When inventory arrives, record the transaction that increases your asset account.
Pay for the inventory
Record the payment to reflect the cash outflow.
Depreciate inventory over time
Periodically record depreciation to reflect the loss of value. Each transaction moves a portion of the asset value into the depreciation expense.
Sample book
Explore a working example of inventory depreciation in the Inventory Depreciation sample book.