Odoo 20 Asset Depreciation: A Complete Guide to Automation

Managing fixed assets involves more than recording their purchase costs. Businesses must also calculate depreciation, maintain accurate asset values, and record the corresponding accounting entries throughout each asset's useful life.

Odoo 20 Accounting makes this process easier by connecting asset creation and depreciation configuration directly to the accounting workflow. When a qualifying vendor bill is confirmed, Odoo can automatically create the corresponding asset and generate its depreciation schedule.

Odoo 20 also introduces changes to how businesses configure asset depreciation. The previous Asset Models have been replaced by Depreciation Models, and asset-related configuration is now more closely connected to fixed asset accounts. Users can also select a different depreciation model for individual vendor bill lines when necessary.

This guide explains how to configure asset depreciation in Odoo 20, create assets from vendor bills, review depreciation schedules, examine accounting entries, and analyze asset values using the Depreciation Schedule report.

What's New in Odoo 20 Asset Depreciation?

Odoo 20 introduces changes to the way businesses configure and manage fixed asset depreciation.

The main update is the replacement of Asset Models with Depreciation Models. These models focus specifically on the calculation methods and settings used to depreciate assets.

Asset-related configuration has also been consolidated around the fixed asset account. Instead of relying on the previous model-based configuration workflow, users can assign a default depreciation model and the relevant accounting accounts directly to the account.

The following table summarizes the main differences.

These changes connect asset creation, depreciation configuration, and accounting records more closely. They also provide flexibility when different assets require different depreciation treatments.

Step 1: Configure a Depreciation Model in Odoo 20

Before creating an asset, configure a depreciation model that defines how its value will be distributed over time.

Navigate to:

Accounting → Configuration → Depreciation Models

Odoo provides predefined depreciation models, including a No Depreciation option. You can select an existing model or create a new one based on your accounting requirements.

Select New to create a depreciation model.

The configuration form contains several fields that determine how depreciation is calculated.

Depreciation Model Name

Enter a descriptive name that identifies the depreciation model.

For example:

- 5 Year Depreciation

- 3 Year Depreciation

- 2 Year Depreciation

Using clear names makes it easier to identify the appropriate model when recording asset purchases.

Method

The Method field determines how the asset's depreciable value is distributed over its useful life.

Odoo 20 provides four options.

Straight Line

The Straight Line method distributes the depreciable value evenly across the selected depreciation period.

For example, an asset with a depreciable value of 100,000 over 24 months has a theoretical monthly depreciation amount of approximately 4,166.67.

Declining

The Declining method applies a fixed depreciation rate to the asset's remaining value.

Because the calculation is based on the remaining value rather than the original value, the depreciation amount generally decreases over time.

Declining Then Straight Line

This method initially applies declining depreciation. It switches to the Straight Line method when straight-line depreciation produces a higher depreciation amount.

No Depreciation

Select this option when depreciation should not be calculated for the asset.

Based On

The Based On field determines whether the depreciation calculation uses a duration or a rate.

The available configuration depends on the selected depreciation method.

Duration

When using a duration-based calculation, specify the period over which the asset should be depreciated.

For example, a five-year depreciation period represents 60 months.

Computation

The Computation field determines how depreciation is calculated for partial periods.

The available options include:

- No Prorata: Uses the first day of the fiscal year as the implied start date, recognizing a full year of depreciation regardless of the actual acquisition date.

- Constant Periods: Divides time into standardized intervals, such as 12 months of 30 days each, to calculate equal depreciation amounts per period.

- Based on Days per Period: Calculates depreciation using the actual number of calendar days in each period.

The selected computation method affects how depreciation is allocated across the schedule.

Not Depreciable

This field defines the portion of the asset's value that should be excluded from depreciation.

For example, if a portion of an asset's value is not depreciable under the company's accounting treatment, enter the applicable amount or percentage according to the field configuration.

Journal

Select the journal used to record depreciation entries.

For example, a company may use a Miscellaneous Operations journal for its depreciation transactions.

After reviewing the configuration, save the depreciation model.

Step 2: Configure the Fixed Asset Account

After creating the depreciation model, connect it to the appropriate fixed asset account.

Navigate to:

Accounting → Configuration → Chart of Accounts

Locate an account with the appropriate asset account type. Odoo 20 supports both Fixed Assets and Non-current Assets account types for asset management.

You can use an existing account or create a new one if necessary.

Open the account and locate its Depreciation section.

This section contains the configuration that connects asset purchases with their depreciation calculations and accounting records.

The main fields include:

Depreciation

Select the default depreciation model for transactions recorded against the account.

When a vendor bill line uses this account, Odoo can apply the configured depreciation model automatically.

Accumulated Depreciation

Specify the account used to track accumulated depreciation.

This account records the depreciation recognized over the asset's useful life.

Asset Expense Account

Select the expense account used to record periodic depreciation charges.

Depreciation reduces the asset's carrying value while recognizing the corresponding expense in the accounting records.

Multi-Ledgers

This option supports depreciation accounting across multiple ledgers when a company maintains parallel accounting records.

The relevant ledger configuration can include separate journals and accounts for accumulated depreciation and depreciation expenses.

Once the required settings are configured, save the account.

Unlike the previous workflow, Odoo 20 does not require the separate asset-model configuration described in earlier versions. The depreciation model and related accounting settings are connected to the asset account.

Step 3: Create a Vendor Bill for the Asset

After configuring the depreciation model and fixed asset account, you can record an asset purchase through a vendor bill.

Navigate to:

Accounting → Vendors → Bills

Create a new vendor bill.

Select the vendor and add a bill line for the asset purchase.

In the bill line's Account field, select the appropriate Fixed Assets or Non-current Assets account configured for asset management.

Odoo uses the depreciation model associated with the selected account as the default for the transaction.

Review the depreciation model displayed on the bill line.

If the purchase requires a different depreciation method or useful life, select another appropriate depreciation model before confirming the bill.

This is particularly useful when a vendor bill includes multiple assets with different depreciation requirements.

For example, a company purchasing laptops and office furniture through the same vendor bill may need different depreciation periods for each type of asset.

The appropriate depreciation model can be selected for each relevant bill line.

Step 4: Confirm the Vendor Bill and Generate the Asset

Before confirming the vendor bill, review the following details:

- Vendor information

- Asset purchase description

- Purchase amount

- Fixed asset account

- Selected depreciation model

Once everything is correct, click Confirm to post the vendor bill.

When the bill line uses a configured asset account and depreciation model, Odoo automatically creates the associated asset record.

The generated asset is placed in the Running state.

An Asset(s) smart button becomes available on the vendor bill, allowing you to access the generated asset directly.

The chatter also records the asset creation activity.

This workflow connects the original purchase transaction with the asset record and its depreciation schedule. It also removes the need to create the corresponding asset record separately.

Step 5: Review the Automatically Created Asset

After confirming the vendor bill, click the Asset(s) smart button to open the generated asset record.

The asset form contains the financial and accounting information associated with the purchase.

The asset is already marked as Running, indicating that its depreciation process has been initiated according to the configured settings.

The form provides several sections for reviewing the asset.

Asset Values

This section displays the asset's original value and relevant dates.

It helps users identify the acquisition cost and other details associated with the asset.

Current Values

This section provides information about the asset's current financial position.

It includes details such as:

- Non-depreciable value

- Current book value

- Depreciation carried forward from previous records

These values help users understand how much of the asset's value remains after accounting for depreciation.

Depreciation Method

This section contains the depreciation model and related calculation settings.

Depending on the configuration, it includes the selected computation method and pro rata date.

Accounting

The Accounting section displays information about the company, relevant accounting accounts, and the journal used for depreciation entries.

The asset form also provides several actions, including:

- Modify Depreciation

- Cancel Asset

- Set to Draft

- New Depreciation

Smart buttons provide access to related records and accounting entries.

The Bills tab also links back to the original vendor bill line, including the amount recorded against the fixed asset account.

Having the purchase transaction and asset information connected makes it easier to trace an asset from its acquisition through subsequent depreciation transactions.

Step 6: Review the Asset Depreciation Board

Open the Depreciation Board tab to examine the scheduled depreciation amounts and the asset's remaining value.

The depreciation board displays the planned accounting entries throughout the asset's depreciation period.

It includes information such as:

- Scheduled depreciation dates

- Individual depreciation amounts

- Cumulative depreciation

- Remaining asset value

These details help users understand how Odoo distributes depreciation across the asset's useful life.

Example: Understanding a Two-Year Straight-Line Depreciation Schedule

Consider an asset with a fully depreciable value of 100,000.00 and a two-year Straight Line depreciation model.

The theoretical monthly depreciation amount is:

100,000.00 ÷ 24 months = 4,166.67

However, the actual schedule may not allocate the same amount to every calendar year.

The asset's start date and selected computation method affect how depreciation is distributed across the schedule.

In the original Odoo demonstration, the depreciation board displays the following allocations:

The displayed amounts add up to the complete depreciable value of 100,000.00.

The original example uses the Constant Periods computation method. Under this method, Odoo divides time into standardized periods when calculating depreciation.

The first and final scheduled amounts can therefore differ from a full year's depreciation depending on the asset's depreciation dates and configuration.

If the depreciation plan needs to change because of revised accounting requirements or updated asset information, use Modify Depreciation to review and adjust the schedule.

Technical verification note: The original example's allocation should be checked against the actual depreciation board before publication. The displayed figures, acquisition date, pro rata date, duration, and depreciation configuration need to be reconciled. The table above preserves the developer's original values and does not represent an independently recalculated example.

Step 7: Examine Depreciation Journal Entries

Each depreciation line displayed on the depreciation board is associated with a journal entry.

Selecting the relevant entry reference opens the corresponding accounting record.

The journal entry records the depreciation expense and the reduction in the asset's carrying value.

Under the accounting treatment demonstrated in the original example, the entry follows this structure:

The expense account is debited to recognize the depreciation expense, while the accumulated depreciation account is credited to record the depreciation accumulated against the asset.

Why Is a Depreciation Journal Entry Still in Draft?

A depreciation entry can appear on the depreciation board while its corresponding journal entry remains in Draft status.

This does not necessarily indicate an error.

In the original demonstration, the entry remains in draft because its scheduled posting date is December 31, 2026.

Odoo displays a notification indicating that the entry is scheduled to be posted on that date.

It is useful to distinguish between three different things:

1. Running asset: The asset has been confirmed and its depreciation process is active.

2. Scheduled depreciation: The depreciation board contains the planned depreciation transactions.

3. Draft journal entry: The corresponding accounting transaction has been generated but has not yet been posted.

As a result, the asset's Posted Entries smart button may show no posted depreciation entries even though the depreciation board already contains scheduled transactions.

Depending on the entry's status, accounting configuration, and user permissions, an eligible draft entry can also be posted manually.

Step 8: Analyze Assets Using the Depreciation Schedule Report

The Depreciation Schedule report provides a consolidated view of fixed assets and their financial values.

Instead of opening individual asset records, users can review depreciation activity and book values across the company.

To access the report, navigate to:

Accounting → Reporting → Depreciation Schedule

The report organizes asset information into several sections.

Characteristics

This section displays asset details such as:

- Acquisition date

- Depreciation method

- Applicable depreciation rate

These details help identify how each asset is configured.

Assets

The Assets section summarizes the movement of asset values.

It includes:

- Opening balances

- Additions

- Disposals

- Closing balances

This provides an overview of changes in asset values during the reporting period.

Depreciation

The Depreciation section presents accumulated depreciation movements, including:

- Opening accumulated depreciation

- Depreciation additions

- Depreciation reductions

- Closing accumulated depreciation

These figures help users review how depreciation has affected asset values over time.

Book Value

The Book Value section displays the remaining carrying value of an asset after accounting for accumulated depreciation.

It helps users understand the value of assets currently recorded in the company's books.

Understanding the Depreciation Schedule Report Example

In the original demonstration, the laptop appears with the following information:

 

The remaining book value is calculated as:

100,000.00 − 9,811.83 = 90,188.17

The report also includes an additional 1,000.00 in the original demonstration data, which affects the displayed report totals.

Because the depreciation entry has not yet been posted, Odoo displays a warning about unposted entries within the reporting period.

To include draft entries in the report figures, enable the With Draft Entries filter.

Users can further refine the report by:

- Selecting the reporting year

- Choosing the relevant ledger, such as Local Gaap

- Grouping results by analytic dimensions where applicable

The Depreciation Schedule report is useful for reviewing asset balances, tracking depreciation movements, and supporting periodic financial reporting.

Frequently Asked Questions

1. What changed in Odoo 20 asset depreciation?

Odoo 20 replaces the previous Asset Models with Depreciation Models. Asset-related configuration is more closely connected to fixed asset accounts, where users can configure the default depreciation model and related accounting accounts. Different models can also be selected for individual vendor bill lines.

2. How do you configure asset depreciation in Odoo 20?

Navigate to Accounting → Configuration → Depreciation Models and create a depreciation model. Next, open the Chart of Accounts and configure the appropriate asset account with the default depreciation model, accumulated depreciation account, and asset expense account.

3. Can Odoo automatically create assets from vendor bills?

Yes. When a vendor bill line uses an appropriate asset account and depreciation model, confirming the bill generates the associated asset record. The generated asset can be accessed through the Asset(s) smart button on the vendor bill.

4. What depreciation methods are available in Odoo 20?

Odoo 20 provides four depreciation methods:

- Straight Line

- Declining

- Declining Then Straight Line

- No Depreciation

The appropriate method depends on the asset and the company's accounting requirements.

5. Can different depreciation models be used for different assets on the same vendor bill?

Yes. Odoo 20 allows users to adjust the depreciation model at the individual vendor bill-line level. This is useful when a bill contains assets with different useful lives or depreciation requirements.

6. How do you view depreciation journal entries in Odoo 20?

Open the asset record and navigate to the Depreciation Board. Each scheduled depreciation line is associated with a journal entry that can be opened for review.

7. Why does a depreciation journal entry remain in draft?

Depreciation entries are generated in draft mode and scheduled for periodic posting. An entry may remain in draft until its scheduled posting date. Its status should be checked separately from the asset's Running status.

8. How do you generate a Depreciation Schedule report in Odoo 20?

Navigate to Accounting → Reporting → Depreciation Schedule. The report provides a consolidated view of asset characteristics, asset balances, accumulated depreciation, and remaining book values.

9. What is the difference between a depreciation model and a fixed asset account?

A depreciation model defines how depreciation is calculated, including the method and duration. A fixed asset account records the asset transaction and connects it with the default depreciation model and relevant accounting accounts.

Conclusion

Odoo 20 Accounting connects fixed asset purchases, depreciation configuration, and accounting records through a more integrated workflow.

By configuring depreciation models and linking them to the appropriate asset accounts, businesses can generate asset records directly from eligible vendor bills and maintain their depreciation schedules without creating each asset separately.

The asset record provides information about the original purchase, depreciation method, current values, and scheduled accounting entries. The Depreciation Board helps users review future depreciation amounts, while the Depreciation Schedule report provides a consolidated view of asset values and depreciation movements.

The ability to select different depreciation models for individual vendor bill lines also provides flexibility when a single purchase transaction includes assets with different depreciation requirements.

Understanding these configuration options and reviewing the generated accounting entries helps businesses maintain more consistent fixed asset records in Odoo 20.