What is Depreciation?
Depreciation tracks the declining value of your rental equipment over time. Renterra uses straight-line depreciation, which spreads the cost of an asset evenly over its useful life.
Which Items Can Be Depreciated?
Only Serial items can be depreciated
Bulk items, Slots, Sale items, and Parts cannot be depreciated
How It Works
Renterra calculates depreciation monthly using the straight-line method:
Monthly Depreciation = (Purchase Price − Salvage Value) ÷ Useful Life (in months)
Depreciation starts the first full month after an item is configured for depreciation. For example, if you buy equipment on January 7th or January 27th, depreciation begins at the end of February either way.
Setting Up Depreciation
Organization-Level Defaults for Depreciation
Set default depreciation values for your entire organization:
Go to Settings → Operations → Accounting
Under Depreciation, there are two settings.
Default Expected Useful Life: Organization-level default for useful life. If this is set, marking an item as capitalized will pre-populate this value by default. You can override this default on an individual item.
Automatically post depreciation to ledger: enable posting to ledger
Ledger Integration
When Automatically Post Depreciation to Ledger is enabled:
On the first of each month, Renterra creates double-entry journal entries
Depreciation Expense is debited (expense recognition)
Accumulated Depreciation is credited (asset value reduction)
These accounts are automatically created if they don't exist
Enabling Depreciation for A Serial Item
For each serial item, you can enable depreciation tracking by:
Clicking the edit pencil icon on the Accounting card
Toggling on Capitalized
Enter required fields (and any optional fields)
Click Submit
Note: You'll use either Purchase Price or Initial Book Value, not both:
Purchase Price — For new assets where you're starting depreciation tracking fresh
Initial Book Value — For assets already partially depreciated when added to Renterra
Setting | Description | Required? |
Capitalized | Whether the item is tracked as a depreciating asset. Toggle on to enable depreciation tracking for this item | Required |
Useful Life | The remaining useful life in months from the depreciation start date | Required |
Wholesale / Purchase Price | The cost you paid to purchase the equipment | Required (if starting fresh) |
Salvage Value | The expected value at the end of the item's useful life (depreciation stops when this value is reached) | Optional |
Initial Book Value | Override the starting value for items already partially depreciated | Required (if asset is partially depreciated) |
Initial Capital Improvements | Add any capital improvements made before tracking in Renterra | Optional |
When you enable depreciation on an item, the Depreciation Start Date is automatically set to the first day of the next month.
Enabling Depreciation for Multiple Items
You can update Capitalized, Useful Life, and Salvage Value across multiple items at once using Bulk Edit. Select items from the Inventory table, Toggle Bulk Edit, and scroll to the depreciation fields.
Viewing Depreciation Data
Inventory Table
New columns available: Salvage Value, Book Value, Useful Life, Life Remaining, and Capitalized. Use these to filter and sort your fleet by depreciation status.
Item Analytics
The ROI card now includes Accumulated Depreciation, showing how depreciation factors into your return on investment calculations.
Depreciation History
Click into any item to see a month-by-month history of depreciation calculations, including any changes to inputs over time.
Adding Capitalized Improvements
When maintenance or repairs extend an item's useful life, you can mark work order line items as Capitalized. This adds the expense to the item's depreciable base, spreading the cost over remaining useful life.
Note: The Capitalized toggle only appears on work order line items if the work order's item is already marked as a capitalized asset.