Asset blocks (Income-tax depreciation)

An asset block is the record that holds one Income-tax block of assets for one fiscal year: its depreciation rate and its opening written-down value (WDV). Income-tax depreciation under section 32 is worked out on blocks of assets of the same class and rate, not asset by asset, so it is a separate book from the Companies Act depreciation that your recurring depreciation schedules post to the ledger. You keep the blocks up to date each year, and the Form 3CD Tax Audit report reads them for clause 18.

Overview

Each asset block is a small record with six fields you can fill in: a block code, the fiscal year, the depreciation rate, the opening WDV, a name and a label. You create one block per Income-tax block for each fiscal year. For example, you might have a 15% block, a 10% block and a 40% block for FY 2026-27, and a fresh set of the same three for FY 2027-28.

An asset block stands on its own. It is not linked to the asset register, to depreciation policies or to any GL account. Nothing posts block depreciation to the ledger. The block's only use is to feed the tax depreciation figure in the Form 3CD report.

When to use it

• At the start of a tax year, or before the tax audit, to record each block's rate and the WDV it carries into the year.
• When you prepare Form 3CD, because clause 18 needs one asset block for each block of the year.
• When you correct a block's rate or opening WDV after the audit figures change.

You do not need asset blocks to post depreciation. The ledger charge comes only from recurring depreciation schedules.

How xMatix handles it

• One record per block per year. Form 3CD clause 18 picks up the blocks whose Fiscal Year is the report's fiscal year and whose company is the company that fiscal year belongs to. A block with no fiscal year, or with another company, is not counted.
• The company comes from your default company. The block's company (Partner Account) is not on the form. When you save a new block, xMatix fills it in from the default company set for you on the Company access tab. If you have no default company, the block is saved with no company, and clause 18 never counts it. See Configuration.
• Depreciation is the rate applied to the opening WDV. For each block, clause 18 multiplies the Opening Wdv by the Depreciation Rate and shows the result. A block has no fields for additions or deductions during the year. As a result, the year's purchases, sales and the 180-day half-rate rule are not applied, and you adjust for them by hand.
• No roll-forward. xMatix does not work out a block's closing WDV or carry it into next year's block. You type each year's opening WDV yourself, usually from the tax depreciation working of the previous year.
• Nothing is posted. Saving, changing or deleting a block changes nothing in the ledger.

Prerequisites

• The fiscal year exists and belongs to your company. See Chart of accounts, books and periods.
• A default company is set for you on Setup → Feature Hub → Administration → Org Settings → Company Access. Your administrator does this.
• The Income-tax block working for the year: each block's rate and opening WDV.
• Permission to create asset blocks. See Permissions.

Procedure

Step 1 — Find your asset blocks

Asset blocks are not in any of the standard apps. Open the app launcher, search for Asset Blocks, and open it. Your administrator can also add it to an app, for example the Fixed Assets app. See Configuration.

The All Asset Block list shows Name, Block Code, Depreciation Rate, Opening Wdv and Created. You can search on the name. Use the column sort and filters to find a block, and select a row to open it.

Step 2 — Create a block

1. On the list, select New.
2. Enter the Block Code, for example the code your tax working uses for the block.
3. Choose the Fiscal Year the block is for.
4. Enter the Depreciation Rate as a fraction: 0.15 for 15%, 0.4 for 40%.
5. Enter the Opening Wdv: the written-down value the block carries into this fiscal year.
6. Enter a GL Account Name. This is the block's name and the only required field. Despite the label, it has nothing to do with GL accounts. Include the year in it, for example "Plant and machinery 15% — FY 2026-27", because no two blocks may share a name.
7. Optionally enter a Label, a short description that clause 18 shows next to the block code.
8. Save.

The block opens on its record page, which shows the same fields. Its company is filled in from your default company.

Step 3 — Change a block

On the record page, select Edit, change the fields and save. Users who are allowed to can also edit a block straight from its row in the list. The next time anyone opens Form 3CD, clause 18 uses the new figures, because the report is worked out fresh every time it opens.

Step 4 — Start next year's blocks

1. Open last year's block and select Clone. xMatix creates a copy with every field, including the company, and, unless you give it a new name, names it after the original with "(Copy)" added.
2. Open the copy and select Edit.
3. Change the Fiscal Year to the new year.
4. Enter the new Opening Wdv: last year's opening WDV plus additions, minus deductions and minus the depreciation allowed, from your tax working.
5. Change the GL Account Name to show the new year, and save.

Cloning is also the easiest way to give a block the right company when someone without a default company has to create it.

Step 5 — Check the figures in Form 3CD

Open Form 3CD Tax Audit in the Financials List app and choose the fiscal year. Expand clause 18. Each block appears as "Block Code — Label @ n% (Income-tax Act)" with its depreciation. The rows end with the Income-tax total, the book depreciation total and the difference. If a block is missing, see Common problems. The full report procedure is on Form 3CD Tax Audit.

Step 6 — Delete a block

On the record page select Delete, or select one or more rows on the list and delete them, then confirm. Form 3CD stops counting the block straight away. Nothing else refers to a block, so deleting one affects only clause 18.

Fields

These are the fields on the New and Edit forms, in form order.

Partner Account (the company) is not on the form. It is filled in on save from your default company and decides which company's Form 3CD counts the block.

Business rules

• Name must be unique. Saving a block whose GL Account Name matches another block's name, ignoring capital letters and surrounding spaces, is refused with "GL Account Name '…' already exists".
• Company is stamped once, on create. On a new block with no company, xMatix sets the company from the creating user's default company. Editing a block later does not change its company.
• Which blocks clause 18 reads. Blocks of the fiscal year's company with that fiscal year, sorted by Block Code (or Label when there is no code).
• How clause 18 works out each block. Depreciation = Opening Wdv × rate, rounded to two decimals. A rate above 1 is divided by 100 first. A block with no usable rate is skipped, not reported as zero.
• What clause 18 does not do. It does not add the year's additions, take off the year's sales, or apply half the rate to assets used for less than 180 days. Adjust the Income-tax figure for these by hand in your audit working.
• No posting and no roll-forward. Blocks are never posted and never updated by xMatix.

Example

A finance user prepares the tax blocks of a manufacturing company for FY 2026-27. Their default company is set to the company, so every block they create belongs to it.

When the tax audit starts, they open Form 3CD Tax Audit for FY 2026-27 and expand clause 18. The rows read: "CP40 — Computers @ 40% (Income-tax Act)" 84,000; "FF10 — Furniture @ 10% (Income-tax Act)" 32,000; "PM15 — Plant @ 15% (Income-tax Act)" 1,86,000 (the labels here are "Computers", "Furniture" and "Plant"). The Income-tax total is 3,02,000. The books show 2,75,000 of depreciation, so the difference is 27,000.

During the year the company bought a machine for 4,00,000 and put it to use in December. Clause 18 does not include it, so the auditor adds half-rate depreciation of 30,000 (4,00,000 × 7.5%) in their working. Next April, the user clones each block, changes the fiscal year to FY 2027-28 and enters the new opening WDV from the final tax working.

Training

Practice exercise

In a sandbox, make sure your user has a default company on the Company access tab. Then:

1. Create a block named "Practice block 15% — current year" with Block Code PR15, the current fiscal year, Depreciation Rate 0.15 and Opening Wdv 1,00,000.
2. Try to create a second block with the same name. Expected result: the save is refused with "GL Account Name 'Practice block 15% — current year' already exists".
3. Open Form 3CD Tax Audit for the current fiscal year and expand clause 18. Expected result: a row "PR15 — … @ 15% (Income-tax Act)" with 15,000.
4. Change the rate to 15 and refresh the report. Expected result: the figure is still 15,000.
5. Clear the rate and refresh. Expected result: the PR15 row disappears.
6. Delete the practice block.

Quick reference

• One asset block per Income-tax block per fiscal year.
• Enter the rate as a fraction: 0.15 = 15%.
• GL Account Name is just the block's name; it must be unique, so put the year in it.
• Fiscal Year must be filled in, or the block never reaches Form 3CD.
• The company comes from your default company; set it before creating blocks.
• Clause 18 = Opening Wdv × rate; additions, sales and the 180-day rule are adjusted by hand.
• Clone last year's block to start the new year, then change Fiscal Year, Opening Wdv and the name.
• Blocks never post to the ledger.

Permissions

Asset blocks follow the Asset Block entity's access in the user's security profile. The seeded profiles Sales Executive, Sales Manager, Service, Standard User and System Admin all have full access to the records. The buttons are granted separately:

A user without a button's permission does not see that button. Blocks feed a statutory disclosure, so give create, edit and delete rights to the finance users who prepare the tax audit. Opening Form 3CD needs its own permissions; see Form 3CD Tax Audit and Security profiles.

Configuration

• Default company for each person who creates blocks. Open Setup → Feature Hub → Administration → Org Settings → Company access, choose the user, and select Make default on a Transact company row. For a user with Access all companies switched on, use Change next to Default company. Without a default company, new blocks have no company and Form 3CD ignores them. See User accounts.
• Show the company on the form. In a tenant with more than one company, add Partner Account to the create layout AssetBlock Create and the record layout AssetBlock View, so users can see and choose the company. See Design a form layout.
• Navigation. Asset Block is in no seeded app; users find it through the app launcher search. To add it to an app such as Fixed Assets, go to Setup → Design Studio → Apps, open the app and use Manage Items.
• Field labels. You can relabel GL Account Name (for example to "Block Name") and Opening Wdv in Setup → Design Studio → Entities → Asset Block.
• List view. Change the columns of All Asset Block, for example to add Fiscal Year or Label, in the entity's views.
• Book side of clause 18. The books figure comes from the company's GL accounts of type Accumulated Depreciation. See GL accounts.
• Mobile. No mobile app includes asset blocks, so they are web only.

Common problems

Clause 18 says "No asset blocks defined for this fiscal year" but I created blocks

The blocks do not match the report's fiscal year and company. Check that each block's Fiscal Year is the year you chose in the report. If it is, the blocks probably have no company, or another company: the user who created them had no default company, or a different one. Set the right default company for that user, then create the blocks again, or clone a block that does appear in the report and change its figures. Delete the blocks that do not appear.

One of my blocks is missing from clause 18

Its Depreciation Rate is blank, zero, or 100% or more (1, or 100 and above), so it is skipped. Enter the rate as a fraction such as 0.15. Also check its fiscal year and company as above.

"GL Account Name '…' already exists"

Another block already has this name, perhaps last year's block. Names must be unique across all years. Add the fiscal year to the name.

The Income-tax depreciation in clause 18 is too low

Clause 18 works only on the opening WDV. The year's additions, including the half-rate for assets put to use for less than 180 days, are not included. Add them in your audit working. Also check that the rate was entered as 0.15 and not 0.015.

I entered last year's closing WDV but the figure is still wrong

xMatix does not work out closing WDV. Check the opening WDV you typed against your tax depreciation working, and remember that sales during the year should have been deducted from it.

Common questions

Does an asset block post depreciation?

No. Asset blocks only feed the Income-tax figure in Form 3CD clause 18. Saving, changing or deleting a block never creates a journal. The depreciation in your ledger is the Companies Act charge, posted by recurring depreciation schedules. The two books normally differ, and clause 18 exists to show that difference: it lists the Income-tax depreciation per block, the book depreciation from your Accumulated Depreciation accounts, and the difference between them. See Running depreciation for the ledger side.

Should I enter the rate as 15 or 0.15?

Enter 0.15. That is how the field is meant to hold the rate. Form 3CD clause 18 also reads any value above 1 as a percentage, so 15 gives the same result there. Be careful with small rates: 0.5 means 50%, not half a percent. A rate of 1, or 100, is read as 100% and the block is left out of the report.

Are my assets linked to their block?

No. Asset blocks are not linked to asset records, policies or schedules, and buying or selling an asset does not change a block. You work out each block's opening WDV in your tax working and type it in. Use a Block Code and Label that match your working so the report is easy to tick off.

Why is the name field called GL Account Name?

That is the label the entity ships with. It is the block's name and has no link to the chart of accounts. Your administrator can relabel it in the entity settings. Whatever the label, the name must be unique, so include the fiscal year in it.

Related topics

• Fixed assets in xMatix
• Form 3CD Tax Audit
• Running depreciation
• Depreciation policies
• Assets
• Asset Block entity reference
• Asset — entity reference
• Depreciation — entity reference