Dispose of a fixed asset

A disposal takes one or more asset items off the books, for example when you sell a van or scrap a broken laptop. You can dispose of several items on one disposal, each with its own selling price and date. For an item you scrap, the selling price is 0.

Steps

1. Open Fixed Assets › Disposal

   In the menu on the left, select Accounts, then Fixed Assets, then Disposal.

   

   1. Disposal under Fixed Assets.
   2. Create new starts a disposal.
   3. The ⋮ menu: View or Delete.

   Selecting Create new creates a draft disposal straight away and opens it as New Disposal. A draft you don't finish stays in the list with a selling price of 0.00. Delete it from the ⋮ menu.

2. Fill in the disposal and its items

   

   1. Select Edit on Disposal Information, then choose the Disposal Account Name: the account the selling price goes to, such as your bank account.
   2. Date of the disposal.
   3. Save keeps the disposal information.
   4. Asset Name: the asset item, shown by its code. Asset Cost fills in.
   5. Selling Price: what you sold it for, or 0 if you scrapped it.
   6. Disposal Date (open period): the day it left your hands. It can't be in the future. An earlier date is fine if its period is still open.
   7. The tick saves the line. The bin removes it.
   8. Save posts the disposal.

   Use Add lines to dispose of more items on the same disposal.

What happens when you save

1. Depreciation is brought up to the disposal date. Months before the disposal month are charged in full. The disposal month is charged only for the days you held the asset before the disposal date. Any charge already posted for a later month is reversed.
2. The asset is cleared at its book value, and the difference to the selling price is a gain or a loss.
3. The asset is marked as disposed. Its depreciation stops and it can't be revalued or disposed of again.

What gets posted

For each item, dated on its disposal date, in your base currency:

Account	Debit	Credit
Disposal account (the posting group's Disposal account, or the Disposal Account Name you chose)	Selling price
Accumulated depreciation	Depreciation built up on this asset
The asset's account		Asset cost
Gain account		The gain, if the price is more than the book value
Loss account	The loss, if the price is less than the book value

Gain or loss = Selling Price − (Asset Cost − Accumulated Depreciation)

The gain and loss accounts are the posting group's Gain account and Loss account under posting groups, or Gain on Asset Disposal and Loss on Asset Disposal in default accounts under account settings.

For example: a laptop cost 1,200, has 300 of accumulated depreciation (book value 900) and sells for 1,000. The gain is 100.

Rules to know

• The disposal date can't be in the future, can't be before the asset's Purchase Date, and must be in an open period.
• If the asset was revalued, the disposal date can't be earlier than the revaluation.
• A saved disposal can't be deleted or saved again.

If something goes wrong

Message	What to do
Please select an asset! / Please select a disposal date!	Fill in the line.
Cannot dispose an unprocessed asset!	Save the asset first.
Asset has already been disposed!	Pick another asset. It has already left the books.
The disposal date for … cannot be in the future.	Use today's date or earlier.
… cannot be disposed of before it was bought on …	Use a date on or after the purchase date.
… was revalued on …, so it cannot be disposed of with an earlier date.	Use a date on or after the revaluation date.
… the gain on disposal account is not set, and this disposal makes a gain of …	Set the gain account in default accounts or on the asset's posting group. The same applies to a loss.
Asset Disposal does not contain any line item!	Add at least one line and save it with the tick.
Can't save an already disposed asset!	This disposal was already saved.
Asset '…': Fixed Asset Posting Group '…': Disposal Account is not set.	Add the Disposal account to the asset's posting group.

Related

• Revalue a fixed asset
• Set up fixed assets