hi I'm Alex and I'm the product manager for appleís today I'm going to tell you about fixed assets and how you attract those for your organization now as a disclaimer this is a pretty big topic and it gets complex so I'm gonna do my best to keep it basic for today but then we'll have other videos that go into more detail later so when you're talking about fixed assets you're actually talking about an item that your organization owns that is spread out the cost of it is spread out over multiple years and you want to track that item on your balance sheet okay so when you're thinking about what would be considered a fixed asset there's two things that you need to consider first is your capitalization policy now what that means is if I'm gonna buy an item and that item is over a certain value it's going to equal a fixed asset so if you go to the store and buy pens for $20 that doesn't really qualify as a fixed asset it's just an expense but if your organization says that any item over two thousand dollars is going to be considered a fixed asset then that's your capitalization policy once you have that and you know what your fixed assets are going to be then you have what's called a depreciable life policy and that says that any fixed asset is going to now depreciate over a certain number of years to spread the expense out so there are certain year requirements depending on the type of fixed asset whether it's like equipment or a building or a car or something like that both just say for basic two thousand dollars and five years okay so over here we buy a computer that computer is two thousand dollars so it meets my threshold for what would be considered a fixed asset so then that fixed asset is going to be depreciated over the next five years to spread out the expense so in year one I'm going to post that I have a depreciation expense for two thousand divided by five 400 dollars and if it's what we call straight-line depreciation which means it's the same for every year over the span then year one two three four five is all going to be the four hundred dollar depreciation expense so at the end of the five years you have now depreciated this item that costs $2,000 down to zero so your balance sheet shows zero but you've spread out the expense over five years so it helps you with tax purposes so again that's a very basic example of what depreciation is and how you would track it for your organization so down the road we'll get more into detail on these two topics of what exactly is a capitalization policy and then to preferred appreciable life what items are what years we'll go through that and then some other examples of how you can depreciate items over a different period of time if you've enjoyed today's content feel free to click the subscribe button and we'll send you more emails with more tips more about clicking click it