Disposals

Navigate to Transactions > Fixed Assets > Depreciations and Disposals, then select Disposals

Dispose of an asset. The left-hand menu is arranged in the suggested order of entries for depreciations and disposals. See FAQs at the bottom of this page.

 

In this topic:

 

Disposal Information

Disposal ID: Enter a unique ID for this disposal.

Disposal Date: When entering your disposal date, keep in mind two important items:

• Disposals calculate depreciation through the end of the fiscal month.

• Disposals calculate depreciation through the end of the current frequency period.

Method: Select a disposal method. You can choose from the following methods:

• S - Sold

  • Note that if an asset is sold, the cash entry must be entered as a deposit, and the gain or loss as a credit to the Fixed Asset account. Enter the cash entry through Cash Receipts.

• A- Abandonment

• L - Like-Kind Exchange

• E - Taxable Exchange

• I - Involuntary Conversion

• T - Transferred

• C - Casualty

• R - Retirement

• O - Other

Reason: Enter a reason for the disposal. What you enter here will appear as the transaction description when you transfer the disposal to the general ledger.

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Asset Information

Category: Select a category from the drop-down list. When you select a category, the asset ID field will display all assets within that category.

Asset ID: Select an asset ID from the drop-down list. The asset's category will display in the Category field.

Asset Description: The asset's description, as entered on the Add New Assets form

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Disposal Details

Choose the kind of disposal to use for this session - either a Full Disposal or a Partial Disposal.

A Full Disposal writes off the asset from the asset general ledger account code and the accumulated depreciation general ledger account code.

A Partial Disposal only writes off the difference between the values in the Before Disposal and After Disposal fields. If you select a Partial Disposal, you will be required to enter values in the After Disposal fields. If you need to enter an additional Partial Disposal for an asset, you must first transfer the previous Partial Disposal.

An asset cannot be disposed if it already has a Disposed status, or has existing depreciation calculations or adjustments.

If an asset is sold, the cash entry must be entered as a deposit, and the gain or loss as a credit to the Fixed Asset account. Enter the cash entry using the Cash Receipts Form.

If the disposal method is "S - Sale", you'll be prompted to create a Cash Receipt upon saving the disposal. Select "No" to create the cash receipt at a later time.

 

Before Disposal

You cannot make changes to the values in any of these boxes. These values were entered when the asset was first added to the system.

Cost or Basis: The system displays the cost or basis.

Salvage Value: The system displays the salvage value of the asset.

Amount to Depreciate: The system displays the amount to depreciate for the asset (cost or basis minus salvage).

Accumulated Depreciation Amount: The system displays the accumulated depreciation amount.

Life (Months): The system displays the life of the asset.

Note: Your depreciation frequency is a pre-set value found in Organization Settings.

 

After Disposal

If you selected the Partial Disposal option button, you are required to enter values in these boxes. See the FAQs section at the bottom of the page to learn how to record a partial disposal for asset impairment losses.

Cost or Basis: Enter the cost or basis of the asset after the partial disposal.

Salvage Value: Enter the salvage value of the asset after the partial disposal.

Amount to Depreciate: The system displays the amount to depreciate for the asset after the partial disposal (equal to the Cost or Basis minus Salvage Value).

Accumulated Depreciation Amount: Enter the accumulated depreciation amount after the partial disposal.

Life (Months): Enter the life of the asset after the partial disposal.

Note: To dispose of an asset with a Zero Book Value, you must first change that asset’s status to Discontinued (Maintenance > Fixed Assets > Assets).

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Dispose & Transfer

After filling out the fields on the form, select Dispose. The asset disposal has been saved, but not yet transferred to the general ledger.

After disposing, select Transfer, or select Transfer to a Session on the left menu to transfer your entries to a session, then post the session to the general ledger. See Transfer to a Session for more information.

 

Consider the following when working with Disposals:

Disposals can only be deleted if they have not yet been transferred. If you make changes to a disposal that has not yet been transferred, the system deletes the disposal depreciation records and recalculates the disposal depreciation.

If an asset is sold, the cash entry must be entered as a deposit, and the gain or loss as a credit to the Fixed Asset account. Enter the cash entry through Cash Receipts.

 

An asset cannot be disposed if any of the following are true:

• The asset has already been disposed (noted by its status as Disposed)

• The asset has existing depreciation calculations or adjustments that have not yet been transferred to the general ledger

• The asset has a status of Inactive or Discontinued

  • To dispose of an asset with this status, change its status to Active, then proceed with the disposal. See Asset Profile to learn how to change an asset's status.

 

FAQs

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