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Disposing of a Fixed Asset

You use the Fixed Asset module to dispose of an asset at your discretion. You do not have to have fully depreciated a fixed asset to dispose of it. The variance from the cost or basis and the accumulated depreciation is posted by e-automate to the adjustment account. When you dispose of a fixed asset, you are required to identify an adjustment account.

Tip: Best practice recommendation is that you post the disposal adjustment to a clearing account. In this case, best practice recommendation is a current asset account as a clearing account. If you secured a net gain or a loss on the sale of an asset, you can use the cashbook receipt transaction to clear your clearing account and post the net result to your net gain/loss on sale of an asset account. If you do not have an account for net loss or gain, create one. Typically, a net gain/loss account is a current asset account.

The above description is typically for fixed assets that you do not have on your item list and for which you will not create a sales invoice. In the event that you decide to sell a fully or partially depreciated piece of equipment that was a rental or demonstration unit, you may consider transferring the equipment from the fixed asset warehouse back to a company warehouse and then selling the item. When you transfer from a fixed asset warehouse to a company warehouse, e-automate transfers the depreciated value of the equipment. This includes removing the fixed asset’s cost or basis value as well as any accumulated depreciation. The net is the equipment's value in inventory. You can then sell the equipment as normal using a regular sales order/invoice.

Getting to the TransactionGetting to the Transaction

From the Accounting menu, select Fixed Assets to opens the Fixed Assets window.

Locate and select the fixed asset of which you want to dispose.

Click [Dispose] to open the New Asset Cost Adjustment window.

Note: E-automate checks the Disposal checkbox automatically.

Basic InfoBasic Info

In the Asset field, verify the correct fixed asset for disposal is selected. Change the asset as necessary.

In the Adjustment account field, use the lookup to select your clearing account. This is the account to which you post the variance between the cost or basis and the accumulated depreciation.

Click [QuickAdd] to add the asset to the list of assets being disposed of.

Repeat Steps 1 through 3 until you have added all the fixed assets of which you want to dispose.

Completing the TransactionCompleting the Transaction

Click [OK] to record the disposal and post the adjustments to the general ledger.