The Ledger Lowdown: Asset Disposal

Jennifer Maroney — Wed, 13 Aug 2008 15:36:00 GMT

Part of the asset life cycle can include disposing of the asset if it is sold, lost, stolen, or broken. When any event occurs that results in you no longer needing to depreciate an asset, you need to add an asset disposal transaction. This transaction does a few things. It tells the system to no longer include the asset in depreciation calculations and tracks the profit or loss of the asset in General Ledger.

Before you dispose of an asset you need to ensure the default disposal accounts are defined. These account defaults are found in Fixed Assets, Configuration, Default Accounts and are called Disposal Gain, Disposal Loss, and Disposal Proceeds. Once you verify the accounts are defined, get rid of your asset:

In Records, Transactions, click Add a New Transaction.
Enter the asset number or click the binoculars to search for the asset.
Select Asset disposal from the Transaction type drop-down list.
Note: An asset acquisition transaction must be added to the asset before you can add a disposal transaction.
Enter the disposal price, disposal date and post date.
Notes:
- Enter a disposal price of zero if there was no loss or gain at the time of disposal.
- The disposal date must be later than the last depreciation date.
In the Disposal Method field, enter a disposal method or select an option from the drop-down list.
Click Save and Close.

Talk to you soon!

The Ledger : disposal

The Ledger Lowdown: Asset Disposal