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Disposal

Disposal

 

You can use the Disposal function to sell off a fixed asset. The fixed asset is treated as disposed off for no money, and the entire net book value is written off as an expense (under 7XXXX GL code).

You need to create a separate sale transaction to reflect money you received from the sale. You can create a Cash Book Receipt under the General Ledger module for this.

Disposal Quick View screen

1.    Update GL button: see example below

2.    Print: This displays the details of the disposal transaction [see example below]

Example: Print Disposal transaction

Note: You can only select one Disposal transaction to print each time

 

Create New/Edit Disposal transaction

Select New to create a new disposal transaction and double click on a transaction to edit.

1.    The Asset Cost, Total Depreciation and Net Book Value are derived from the Fixed Asset Register

2.    Disposal Amount: This is the amount the fixed asset sold for

3.    Category Code is also derived from Fixed Asset Register

4.    It is compulsory to set these disposal codes for disposal

Asset Code: Select the asset code to be disposed off

Voucher Number: This follows the format set in Company Settings under Admin Tools

Asset Name: This name is picked up automatically after selecting the Asset Code

Disposal Date: Select the date of the disposal transaction

Disp Invoice No: If available, you can keep a record of the invoice number for the disposal

Description/Sold To: Enter a brief Description of the sale or the person whom you sold to

Department and Job code: You can select a department and job for fixed assets for categorising and filtering purposes

Disposal Amount: You can make a note of the sale amount of this fixed asset here. There are no GL postings for this. You need to create a separate sales transaction for this (e.g. using Cash Book Receipt in the General Ledger if it is a cash transaction, or Sales Entry if it is a credit sales)

Gain/Loss: You can see the gain or loss from this disposal here. This is calculated automatically after you enter the Disposal Amount. It is the difference of the Net Book Value and the Disposal Amount.

Disposal GL Codes

Account Name	Debit (DR) or Credit (CR)	GL Code
Asset Cost	CR	2XXXX
Asset Accum Depreciation	DR	2XXXX
Disposals account	DR & CR	7XXXX

Update GL function

You can select the Update GL button from the Quick View screen to automatically post GL double entries based on the selected GL codes.

You can see the double entries that will be posted to GL below. The balances from the fixed asset cost and fixed asset accumulated depreciation GL codes are cleared into an Assets Disposals account which is an expense GL code (7XXXX) [see below]. The fixed asset is treated as fully written off.

Follow the steps to post to GL.

Step 1: Select Update GL.

Step 2: Select Yes to confirm

Step 3: You will notice that the Update to GL checkbox is ticked [see red box]

 

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