This guide provides step-by-step instructions for correctly recording GST on asset purchases, specifically when the asset is financed and no immediate payment is made. It ensures accurate reflection in the BAS report and reconciliation of GST.
Scenario
You have purchased an asset and need to account for GST, but the purchase is financed, meaning either a deposit has been paid, or no up front payment is made.
1.Record the Creditors Invoice: •In the header section of the invoice, enter a zero amount to reflect that no immediate payment has been made. 2.Enter Line Item Details: •For each item associated with the asset purchase, create a line entry. •Ensure that each line item is detailed accurately, including descriptions, amounts, and applicable GST. •Confirm that the GST amount is properly calculated and recorded for each item, reflecting the total GST payable for the asset. •If a deposit has been paid, users will need to enter a negative value line item to a clearing account using tax code N, and then enter a cash book entry for the deposit paid to the same clearing account, using tax code N. •Enter a negative value line item for the amount being financed to the GL account for the loan (a new GL account may need to be created), using tax code N.
 Example of Fixed Asset invoice entry with a deposit paid
 Example of Cash Book entry for deposit paid on fixed asset
This method allows for accurate tracking of both the asset value and GST without an upfront cash payment in full. |
