Why fixed assets matter for your SME
Every purchase of machinery, equipment, vehicles or IT systems changes your company's assets and results. Under Swiss accounting, these items are not recorded as a simple expense for the period, but as fixed assets: values that remain on the balance sheet and whose cost is allocated over time through depreciation.
For an SME, managing fixed assets correctly means complying with the Code of Obligations (CO), presenting a reliable balance sheet and calculating taxable profit accurately. Common mistakes — capitalizing an asset in the wrong category, forgetting depreciation or confusing accounting and tax treatment — can distort operating margin and lead to adjustments during audit or tax filing.
This guide explains step by step how to identify, record and depreciate machinery, equipment and other investments, with reference to Swiss SME practices and Accountex features to automate the process.
What qualifies as a fixed asset
An asset is capitalized as a fixed asset when it meets three cumulative criteria under Swiss accounting standards (Swiss GAAP FER/GAAP):
Useful life longer than one year
The asset must be usable for more than one financial year. Consumables, small tools and low-value components remain in the income statement.
Material value
There is a materiality threshold: many SMEs adopt CHF 1'000–5'000 per individual asset. Lower amounts may be recorded directly as an expense, if consistent with company policy.
Business use
The asset serves operational activity. Purely financial investments or assets held for resale fall under other balance sheet items.
Ancillary costs — transport, installation, commissioning, notarial fees for property — must be capitalized into the acquisition value. Ordinary maintenance expenses, however, remain period charges.
Main fixed asset categories for SMEs
In the Swiss chart of accounts, tangible fixed assets are distinguished by nature and useful life. Here is an overview of the most common categories in small and medium-sized businesses:
| Category | Typical examples | Account (SME) | Indicative useful life |
|---|---|---|---|
| Machinery and plant | CNC lathes, industrial printers, production lines | 1500 | 8–15 years |
| Equipment and furniture | Shelving, workbenches, office furniture | 1510 | 5–10 years |
| Company vehicles | Vans, passenger cars, operating machinery | 1520 | 5–8 years |
| IT systems | Servers, computers, software with perpetual licence | 1530 | 3–5 years |
| Property and land | Warehouses, commercial premises, building land | 1600 / 1700 | Land: not depreciable; buildings: 20–50 years |
| Intangible fixed assets | Patents, licences, goodwill | 1800 | 3–20 years (variable) |
The useful lives shown are indicative. Each SME must define a depreciation policy consistent with actual use of the asset and document it in the fixed asset register.
Accounting entry: from purchase to register
When an investment meets the capitalization criteria, recording follows a standard double-entry pattern:
Example: purchase of machinery for CHF 48'000 (VAT excluded)
A mechanical workshop purchases a milling machine. The supplier invoices CHF 48'000 + 8.1% VAT. Transport and installation: CHF 2'000.
| Account | Description | Debit | Credit |
|---|---|---|---|
| 1500 | Machinery (48'000 + 2'000) | 50'000 | — |
| 1170 | Input VAT | 3'888 | — |
| 2000 | Trade payables | — | 53'888 |
Alongside the journal entry, each asset must be recorded in the fixed asset register with: identification number, description, acquisition date, acquisition value, useful life, depreciation method and location if applicable. This register is mandatory for companies subject to ordinary audit and represents a best practice even for micro-enterprises.
Depreciation methods
In Switzerland, SMEs predominantly apply straight-line depreciation. Other methods are permitted if they realistically reflect consumption of the asset:
Straight-line depreciation
Net cost (acquisition value minus residual value) is allocated in equal instalments over the entire useful life. It is the simplest method and the most widely used among Swiss SMEs.
Formula: annual charge = (acquisition cost − residual value) ÷ useful life
Example: machinery CHF 50'000, useful life 10 years, residual value CHF 0 → annual charge CHF 5'000.
Declining-balance depreciation
Higher charges in the early years, calculated on the remaining book value. Useful for assets that lose value quickly (IT, vehicles). Requires consistency across periods and documentation of the choice.
Formula: charge = remaining book value × declining rate
Example: 30% rate on CHF 50'000 → year 1: CHF 15'000; year 2: CHF 10'500 (on CHF 35'000).
The annual depreciation entry records an expense in the income statement and reduces the asset value on the balance sheet:
| Account | Description | Debit | Credit |
|---|---|---|---|
| 6800 | Depreciation on machinery | 5'000 | — |
| 1590 | Accumulated depreciation on machinery | — | 5'000 |
Accounting and tax: two perspectives to keep separate
Commercial accounts follow accounting standards (CO, Swiss GAAP FER/GAAP) and reflect the going concern principle. Tax treatment, however, is based on federal and cantonal tax law, which provides specific depreciation rates and useful lives — often more favourable for accelerating tax deductions.
For corporations, the Federal Direct Tax Act (FDTA) allows accelerated depreciation on certain assets. At cantonal level, rates may vary: machinery may be depreciated for tax purposes at 30–40% in the first year, while accounting applies 10% straight-line. This difference generates deferred taxes, which must be monitored in the balance sheet.
| Aspect | Commercial accounting | Tax treatment |
|---|---|---|
| Legal basis | CO art. 957 et seq., Swiss GAAP FER/GAAP | FDTA, cantonal tax law |
| Useful life | Estimated based on actual use | Minimum and maximum rates by category |
| Method | Straight-line or declining-balance (consistent) | Accelerated depreciation often permitted |
| Objective | True and fair view of financial position | Determination of taxable profit |
| Reconciliation | Tax adjustments in the income statement or in notes to the financial statements | |
Sole proprietorships and general partnerships may, in certain cases, opt for direct tax accounting, simplifying management. GmbHs and AGs must instead maintain full commercial accounts and reconcile tax differences.
Special cases: leasing, repairs and disposals
Operating lease vs finance lease
Under an operating lease, the asset remains the property of the lessor: lease payments are periodic expenses. Under a finance lease, the asset must be capitalized on the balance sheet with the corresponding liability; depreciation follows standard rules. Classification depends on contract duration, residual value and buyout clauses.
Improvements vs maintenance
Work that extends useful life or significantly increases productive capacity must be capitalized and depreciated. Ordinary maintenance — servicing, standard spare parts — remains a period expense. Documenting the nature of the work avoids reclassification during audit.
Disposal and sale
When selling or scrapping an asset, calculate net book value (cost minus accumulated depreciation). The difference from the sale price generates an accounting gain or loss. For tax purposes, gains and losses may be treated differently depending on canton and nature of the asset.
Physical inventory and year-end closing
Before the annual closing, verify that the fixed asset register matches reality:
- 1Register vs reality check: does every recorded asset still exist and is it where indicated? Lost or sold assets must be removed from the register.
- 2Pro rata temporis depreciation: assets acquired mid-year are depreciated proportionally (e.g. purchase in June → 6/12 of the annual charge).
- 3Impairment: if an asset has permanently lost value (obsolescence, damage), consider an extraordinary write-down beyond ordinary depreciation.
- 4Documentation: keep invoices, lease contracts, appraisals and the updated register for at least 10 years (CO requirement).
An accurate inventory ensures a consistent balance sheet and simplifies the work of the auditor or tax advisor.
Common mistakes among Swiss SMEs
| Mistake | Consequence | Solution |
|---|---|---|
| Recording investments as expenses | Inflated profit, understated assets | Define capitalization threshold and check it on every invoice |
| Forgetting year-end depreciation | Non-compliant balance sheet, overstated profit | Plan closing with calendar and checklist |
| Inconsistent useful lives across periods | Distorted depreciation, flagged in audit | Document policy and apply it uniformly |
| Confusing VAT and asset cost | Incorrect fixed asset value | Capitalize net amount only; VAT to account 1170 |
| Not updating register after sales | Ghost assets on balance sheet | Record every disposal with date and reason |
How Accountex simplifies fixed asset management
Accountex integrates fixed asset management directly into the daily accounting workflow. When you record a purchase invoice, you can classify it as an investment and automatically activate the asset record with category, useful life and depreciation method.
At year-end, the software calculates depreciation charges — including pro rata temporis amounts — and generates the corresponding journal entries. The fixed asset register stays always up to date and accessible, with the net book value of each asset visible in real time.
For SMEs that need to reconcile accounting and tax treatment, Accountex lets you record tax adjustments separately, maintaining a compliant commercial balance sheet and simplifying tax return preparation. Less Excel, fewer manual errors, more time for running the business.
Operational checklist for your SME
- Define capitalization threshold and depreciation policy by category
- Capitalize ancillary costs (transport, installation) into asset value
- Keep an updated register with all identification data
- Calculate annual depreciation before year-end closing
- Verify consistency between commercial accounts and tax adjustments
- Conduct physical inventory and record disposals and sales
- Archive documentation for at least 10 years