Moving Asset from Stock Item to Fixed Asset Item

Question: 

We have added Asset Item as a Stock / consumable Item. How to move this item to the Fixed Asset register, so that Depreciation can be applied on it?

Answer: 

Please follow the steps given below to have stock items moved to fixed asset items.

Stocking Out Consumable Item

1. Create a Stock Entry of type Material Issue

2. Select Items, with respective Source Warehouse, where stock of item is available

3. For an item, select "Stock Adjustment" as a Difference Account.

On submission of this Stock Entry, the item in question will be completely stock-out from your Warehouse. Also, the item's valuation will be debited in the Stock Adjustment Account.

Adding Item as Fixed Asset Item

1. Create a New Asset from Assets > New

2. In the Asset master, select Item and enter relevant details

3. Select "Is Existing Asset" as Yes.

And then again, to update a fixed asset account, you have to pass a Journal Entry where you can debit the Fixed Asset account and credit the Stock adjustment account.