About asset disposals—Fixed Assets Management

Dispose of an asset when all or part of the asset is sold, retired, stolen, destroyed, or otherwise removed from service.

Full and partial disposals

Fixed Assets Management supports both full and partial asset disposals. A full disposal removes the entire asset from service. A partial disposal removes only a portion of an asset from service while the remaining portion continues to depreciate.

Types of asset disposals

Fixed Assets Management supports the following disposal types:

  • Sale: You receive a payment in exchange for the asset or portion of the asset.

  • Casualty loss: The asset or a portion of the asset is destroyed or damaged due to an unforeseen event or accident. No payment is received.

  • Theft: The asset or portion of the asset is stolen. No payment is received.

  • Other: The asset is disposed of for any other reason. For example, it might still be in your possession, but it has reached the end of its useful life or has no resale value. No payment is received.

What happens after disposal

Fully disposing of an asset does the following:

  • Changes the asset state to Disposed.

  • Calculates gain or loss amounts and creates a disposal journal entry. For depreciable assets, a separate disposal journal entry is created for each depreciation schedule.

  • Records the disposal on the asset. For depreciable assets, the disposal is also recorded on each depreciation schedule.

  • For depreciable assets, changes depreciation entries in the Not posted state to Canceled.

For assets depreciating under the Daily method, disposals can result in additional depreciation schedule updates. See How full disposals affect Daily depreciation schedules.

Partially disposing of an asset does the following:

  • Calculates gain or loss amounts and creates a disposal journal entry. For depreciable assets, a separate disposal journal entry is created for each depreciation schedule.

  • Records the disposal on the asset. For depreciable assets, the disposal is also recorded on each depreciation schedule.

  • For depreciable assets, updates the remaining depreciation for each depreciation schedule.

  • For depreciable assets, adjusts the depreciation entries that are not posted yet based on the new total remaining depreciation.

  • Keeps the asset in service.

Journal entries for disposals

When an asset is disposed of, Fixed Assets Management automatically calculates gain or loss and creates disposal journal entries.

For depreciable assets, disposal journal entries are posted to the journal associated with the depreciation rule. For nondepreciable assets, disposal journal entries are posted to the Fixed Assets Management journal. The journal entries use the Disposal GL account assigned on the asset.

Disposal journal entries contain the following information:

  • Dimensions: All dimensions copied from the asset.

  • Posting date: The disposal date.

  • Memo: The Description field copied from the asset.

  • Description: "Full disposal: ID--Name" or "Partial disposal: ID--Name". Where "ID--Name" is replaced with the ID and name of the asset.

You can view disposal journal entries and gain or loss information from a depreciation schedule for depreciable assets or from the Disposals tab for nondepreciable assets. Learn more about viewing disposal journal entries.

For examples of gain and loss calculations and disposal journal entries, see Full disposal examples and Partial disposal examples.

Correcting disposals

If a disposal was recorded incorrectly, you can either revert or reverse the disposal. The available action depends on your Fixed Assets Management configuration.

  • Revert deletes the disposal record and associated journal entries.

  • Reverse preserves the disposal record and creates reversal journal entries to offset the original disposal journal entries.

See Correct disposals to learn more.