Partially disposing of an asset (tutorial)

Partial disposals are entered whenever an asset's value is affected by selling or writing off any part of it. This tutorial shows how to enter a disposal transaction for an asset.


Open the tutorial database Learn how.

image\bm1.gif This tutorial uses the List assets window.  To open the List assets window either click the List assets command on the Assets menu or press CTRL-L.


Step 1: Entering a partial disposal


Open the List assets window and type 'comp6' in the Search key field to select the COMP600 asset:




Note that the asset's cost is displayed as $0.00: the list shows the year opening cost, and as the asset was purchased in the current financial year it didn't have a value at the beginning of the year. If you open the Details tab you'll see that its purchase value was $3,360.00.


image\bm1.gif  To verify the effect of the purchase period on the asset's value, open the Depreciation tab and step the periods while watching the Year to date and Period closing values.


This computer's purchase included a 15-inch monitor, which cost $350.00 in a detailed invoice. This monitor is to be sold off for $250.00, and a replacement 17-inch monitor purchased.


Click the Transactions Tab, then the Disposals sub-tab and click Add to enter the disposal using the Asset disposal window:




Enter the following information:


Date  14/2/2001

Recovered $250.00

Quantity  0

Notes  15" monitor sold off


The Period field will update to show period 11. Leave the Asset completely disposed option unchecked.


Enter $350.00 in the Cost field in the Write backs section. As this asset was purchased in the current financial year there are no depreciation figures (revaluations, tax depreciation, or accounting depreciation) to be written back.


image\bm1.gif  If the asset is marked as completely disposed, the Write backs fields will be hidden and all write backs will be calculated automatically. Depreciation for the current financial year doesn't need to be written back, since all calculations are made from the beginning of the current year to the current period and include all additions and disposals.


image\bm1.gif  If the disposal is of a percentage of the asset the write back can be calculated by entering the percentage in the % disposed field and clicking the Calculate button.


Click OK to complete the transaction entry.



Step 2: Entering an addition for the replacement monitor


In this case, the asset's disposal will have a matching addition. This won't always be the case.


Click the Additions tab and click the Add button to enter the addition for the new monitor. Enter the following information:


Date  14/2/2001

Value  $504.00

Quantity  0

Notes  17" monitor


Click OK to save the addition.


image\bm1.gif  Transactions can be edited at any time during the year to correct any errors.



Step 3: Viewing the asset's depreciation


To view the changed details for the asset click the Depreciation Tab. Select period 12 to view the year end figures.


You can see that the writebacks on disposal are $350.00. If you click back to Transactions:Disposals tab you'll see that this is a writeback to cost, and that there is a disposal loss of $100.00 on the asset since the sale proceeds were only $250.00.


By opening the Depreciation tab again and stepping through the periods you can see how the accumulated depreciation and year to date value are calculated, taking additions and disposals into account.


What next?


These transactions tutorials have shown how to:



The next tutorial section, Administration tasks tutorials, shows how to perform general administration tasks and how to post depreciation figures to your general ledger.



See also

Asset transactions tutorials