Topic: Convert building materials to fixed asset
We have a building that was just constructed. I want to capture the building as a fixed asset.
There are two ways that I have tried to do this:
1. the first approach is to add the building as fixed asset, and capture the cost of building it as the purchase price.
The problem with this approach is that it will debit/credit the accounts twice. first as revenue/expenditure during the purchase of building materials for constructing the building.
2. the second approach is to capture only the building materials (debit/credit bank/building - under fixed assets). the problem I have notice with this approach is that although the account will balance, the building will not show up in fixed assets register, and depreciation/valuation cannot be carried out on the building.
please what is the proper way to handle this