What is required before you can run depreciation on fixed assets?

The process of running depreciation on fixed assets in Xero requires that the asset must have been registered. This means that the asset needs to be properly entered into the system with all relevant details, such as acquisition date, cost, useful life, and depreciation method. Without this registration, the system lacks the necessary data to calculate depreciation accurately.

Registered assets allow Xero to track their value over time, update their financial records accordingly, and ensure compliance with accounting standards. This ensures that the depreciation reflects the asset's use and wear over its useful life.

In contrast, the other options do not stand as prerequisites for running depreciation. Draft assets do not prevent depreciation from being processed, as they are simply assets that have not yet been finalized. A backup of the system, while important for data integrity, is not a requirement for running depreciation calculations. Additionally, there's no stipulation in Xero that assets must be at least a year old to start depreciating; depreciation can begin based on the asset's registration and acquisition date.