How to Track Assets, Liabilities, and Depreciation with Baselane

Baselane’s Assets, Liabilities, and Depreciation feature lets you track property equity, loans, fixed assets, and IRS-supported depreciation methods directly in your account. This helps you maintain a compliant, organized financial structure without relying on spreadsheets.

In this article, we will cover:

• What is Balance Sheet Management & Asset Depreciation
• How to Add and Manage Property Financial Details
• How to Add Liabilities (Loans)
• How to Add and Track Assets
• How Depreciation Works in Baselane
• Property-Specific Depreciation Rules
• Understanding the Balance Sheet Report
• Cost Segregation (Reclassified Assets)
• Important Notes and Limitations
• Frequently Asked Questions

What is Balance Sheet Management & Asset Depreciation

• Track fixed assets (properties, vehicles, equipment, etc.)
• Add and manage liabilities (loans, mortgages)
• Calculate property equity dynamically
• Apply IRS-supported depreciation methods
• Generate a balance sheet report with assets, liabilities, and equity

Note: Property financial details are visible to all users. Advanced depreciation tracking and multiple liability management require Baselane Smart.

How to Add and Manage Property Financial Details

1. Log in to your Baselane account.
2. Navigate to the Properties tab
3. Click Add Property and enter your property details.
4. Once the property is created, locate it in the Property Summary section and click Edit.
5. Select Financial Details.
6. Enter the purchase price and any other relevant financial information.
   • Property purchase details
   • Equity details
   • Depreciation details 
   • Additional information
7. Click Save & Close.

Baselane automatically calculates property equity based on your purchase price and associated liabilities. 

Example: If a property was purchased for $200,000 and has a $100,000 loan, the system calculates 50% equity. Property equity updates dynamically as liabilities and assets are added or adjusted.

How to Add Liabilities (Loans)

With Baselane Core

• You may add one loan or liability per property.

With Baselane Smart

• You may add multiple liabilities per property.

To add a liability:

1. Select your property under the Properties tab.
2. Locate the property in the Property Summary section and click Edit. 
3. Once property financial details have been added, select View assets and liabilities
4. Select Loans and liabilities.
5. + Create loan and liability 
6. Enter the following information
   • Basic details 
   • Loan details
   • Payment detials 
   • Interest details
7. Click Create loan & liability
   • The balance sheet will reflect the current outstanding balance as of the selected report date.

How to Add and Track Assets

All properties are considered assets in Baselane, but not all assets are properties.

With Baselane Smart, you can:

• Add individual tangible assets (e.g., car, equipment).
• Toggle depreciation on or off.
• Link transactions (such as capital expenditures) to individual assets.

When Adding an Asset

1. Click Add Property and enter your property details.
2. Once the property is created, locate it in the Property Summary section and click Edit.
3. Select View Assets & Liabilities.
4. Click Add Fixed Asset.
5. Complete the following fields:
   • Asset Name
   • Property (select from the dropdown)
   • Purchase Price
   • Purchase Date

Depreciation Details

1. Toggle on Depreciation Details (if applicable).
2. Select the Depreciation Method (dropdown).
3. Enter:
   • Start Date
   • Useful Life
   • Salvage Value
   • Bonus Depreciation (if applicable)
4. Select Create asset. Note: Depreciation transactions will begin generating monthly (visible within 24 hours of asset creation).

How Depreciation Works in Baselane

Baselane offers three IRS-supported depreciation methods:

• Straight Line
• Double Declining
• Accelerated

Depreciation creates a non-cash monthly expense that reduces taxable income while not affecting cash flow.

Depreciation transactions:

• Are generated monthly.
• Appear after 24 hours.
• Automatically accumulate in your balance sheet.

Important: Baselane does not provide tax advice. You should consult a CPA before selecting depreciation methods or determining useful life.

Property-Specific Depreciation Rules

For property assets, you must define:

• Land Value
• Building Salvage Value
• Land cannot be depreciated.
• Depreciation is calculated as: Purchase Price - Land Value - Building Salvage Value

If asset details are edited after depreciation begins:

• All prior depreciation transactions are deleted.
• The system recalculates depreciation based on updated values.

Understanding the Balance Sheet Report

You can access your balance sheet report from the Reports section.

The report includes:

• External accounts
• Fixed assets
• Liabilities
• Owner’s contribution
• Equity

For assets:

• The balance sheet reflects purchase price minus accumulated depreciation.

For liabilities:

• The system reflects the current outstanding balance as of the selected "As of" date.

You may filter:

• By property
• Adjust the “As of” date
• Download as CSV
• Download as PDF

The balance sheet follows standard accounting principles: Total Assets = Total Liabilities + Equity

Cost Segregation (Reclassified Assets)

Cost segregation, labeled as Reclassified Assets, allows you to:

1. Break a property into individual depreciable components.
2. Assign different depreciation schedules to items such as:
   • Roof
   • Plumbing
   • Structural components
3. When reclassified assets are added:
   • The value is removed from the main property.
   • The property asset value decreases.
   • Depreciation applies to the reclassified component separately. 

Important Notes and Limitations

• Multiple liabilities per property require Baselane Smart.
• Depreciation begins generating after 24 hours.
• Editing asset details resets and recalculates depreciation.
• Historical balances for external accounts are not currently supported (to be improved in the future).
• Security deposits appearing as liabilities are currently under review due to a known issue.
• We recommend reviewing your depreciation method with a CPA or a qualified tax professional to ensure it is accurate for your specific situation.

Frequently Asked Questions

Do I need Baselane Smart to use depreciation?
Advanced depreciation tracking and multiple liabilities require Baselane Smart.

Can I depreciate land?
No. Land cannot be depreciated.

When do depreciation transactions appear?
They are created monthly and appear within 24 hours of asset creation.

What happens if I edit an asset after depreciation starts?
All prior depreciation entries are deleted and recalculated.

What happens to my depreciation data if I cancel Baselane Smart?

If you cancel your Baselane Smart membership, you will not lose any depreciation data that has already been recorded in your books. All previously posted depreciation entries and historical reports will remain available in your account. However, new automatic depreciation calculations and entries will stop once your Smart membership is canceled.