If you depreciate your assets at the end of the financial year, make this step a part of your end-of-year routine. See Year-end tasks. Consult an accounting advisor (such as your accountant) for information about when to depreciate your assets.

Create a depreciation asset account

1. In MYOB Essentials, click your business name and choose Accounts List. The Accounts List page appears, listing all your accounts.

2. Find an asset account in the list that contains assets which are depreciated (for example, MotorVehicles (fixed asset account 1-1140). Make note of the Account number, Account name and account type.
3. Click Add new. Blank fields appear to create a new account.
4. Enter a unique Account Number based on the one you made note of at step 2 (e.g. 1-1150).
5. Enter the Account Name that you wrote down at step 2 and add ‘Accumulated Depreciation’ (or a standard abbreviation) at the end (e.g. Motor Vehicles—Accum Dep’nDepreciation).
6. Select from the list the same account Type that you made note of at step 2 (e.g. Fixed Assets).
7. Enter the Opening Balance for this new account.
8. Select a Tax Rate from the list. If unsure, check with your accounting advisor.
9. Click Save. The Accounts List page reappears.
10. Repeat from step  2 to 4 to create a new asset depreciation account for each type of asset you depreciate.
11. Click Save. The Accounts List page reappears with the new accounts listed.

Create a depreciation expense account

1. In MYOB Essentials, click your business name and choose Accounts List. The Accounts List page appears, listing all your accounts.

2. Click Add new. Blank fields appear to create a new account.
3. Enter a unique Account Number (e.g. 6-2070).
4. Enter Depreciation as the Account Name.
5. Select Expense from the account Type list.
6. Enter the Opening Balance for this new account.
7. Select a Tax Rate from the list. If unsure, check with your accounting advisor.
8. Click Save. The Accounts List page reappears.

Record a depreciation amount using a journal entry

1. In MYOB Essentials, click your business name and choose General journals. The General journals page appears.
2. Click Create Journal. The Journal entry page appears.
3. Enter or choose a date in the Date field.

4. Make sure the Reference number is correct. If not, enter a new reference number in the Reference field.

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   Changing the numbering If you change the Reference number, you’ll change the automatic numbering. For example, if you change the number to JE000081, the next time you create a journal entry, MYOB Essentials will display the new reference number as JE000082.

5. If you want, enter Notes to describe the set of entries.
6. In the Amounts are field, select whether you want line item amounts to be Tax/GST inclusive or Tax/GST exclusive.
7. Enter all of the individual depreciation amounts
   1. From the Account list, select the first depreciated asset account listed (e.g. 1-1150 Motor Vehicles—Accumulated Depreciation).
   2. Add a short Description for the line item (e.g. 2018 Toyota depreciation).

   3. Enter the depreciation amount in the Credit column (e.g. 1200).

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      Do not enter negative amounts (e.g. -345.00). For more information see Entering amounts in journal entries.

   4. Select the appropriate Tax Rate/GST Type from the list. If unsure, check with your accounting advisor.
      The Tax Amount/GST Amount is calculated.
   5. Repeat from step 7 for all other asset depreciation accounts.
8. When all of the individual depreciation amounts are entered, enter the amount which will balance them.
   1. From the Account list, select the depreciation expense account you set up above in To create a depreciation expense account (e.g. 6-2070 Depreciation).
   2. Add a short Description for the line item (e.g. 2018 Depreciation).

   3. Enter the depreciation amount in the Debit column (e.g. 1200).
      This amount must equal the total of all the depreciation line items you‘ve entered in the Credit column, i.e. they must balance.

      UI Text Box
      size medium type note
      Do not enter negative amounts (e.g. -345.00). For more information see Entering amounts in journal entries.

   4. Select the appropriate Tax Rate/GST from the list. If unsure, check with your accounting advisor.
      The Tax Amount/GST Amount is calculated.
9. Check that the total of your depreciation line items is balanced by your Depreciation expense account line item.
10. Check the total Debits and Credits.
    If the amounts are not equal, there will be an amount in the Out of balance by field. If you see an amount in this field, make sure that for each credit, there’s an equal debit, and vice versa. The Out of Balance by amount must equal 0.00 before you can continue.
11. Click Save.

Here's our journal example - note the Out of balance by is zero.

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