Partial disposal
A partial disposal is a disposal in which the disposal quantity you specify is less than the total asset quantity.
How does Asset Management Process Partial Disposals?
When a disposal is partial, the application creates a new, separate asset from the disposed quantity and disposes of that new asset.
The application divides the original asset's cost, basis, YTD, and LTD depreciation between the original asset and the new asset. The division depends on the quantity and costs of the original asset's items. You can inquire on an asset's quantity and cost on Items (AM20.3).
Example: Multiple Item Assets With Different Costs
An asset can have multiple items, each with different costs. If one or more items of an asset are disposed, the division of cost, basis, and depreciation is based on a fraction. The cost of the disposed item or items is the numerator and the total asset cost is the denominator. For example:
| Item # | Description | Quantity | Cost |
|---|---|---|---|
| 1 | TV | 1 | $600 |
| 2 | VCRs | 1 | $400 |
| Totals: | 2 | $1000 |
If item 2 is disposed, the new, disposed asset is assigned one item costing $400, and 2/5ths (400/1000) of the original asset's basis, YTD and LTD depreciation. The original asset retains item 1 and 3/5ths (600/1000) of basis, YTD and LTD depreciation.
Example: Single Item Assets With Item Quantities Greater Than One
An asset can have one item that has a quantity greater than 1. If one or more instances of the item are disposed, the division of cost, basis, and depreciation is based on a fraction. The number of disposed instances is the numerator and the total asset item quantity is the denominator. For example:
| Item # | Description | Quantity | Cost |
|---|---|---|---|
| 1 | VCRs | 4 | $1000 |
| Totals: | 4 | $1000 |
If one VCR is disposed, the new, disposed asset is assigned one item with a quantity of 1, cost of 1/4th of $1,000 or $250; the new asset is assigned 1/4th of the original asset's basis, YTD, and LTD depreciation. The original asset retains one item with a quantity of 3, cost of 3/4ths of $1,000 or $750; it also retains 3/4ths of the basis, YTD, and LTD depreciation.
Example: Multiple Item Assets With Item Quantities Greater Than One
An asset can have both multiple items and items with quantities greater than 1. The division of cost, basis, and depreciation is based on a fraction. The numerator of the fraction is the fraction of the item being disposed multiplied by that item's cost. The denominator is the total asset cost.
For example:
| Item # | Description | Quantity | Cost |
|---|---|---|---|
| 1 | TV | 1 | $600 |
| 2 | VCRs | 2 | $400 |
| Totals: | 3 | $1000 |
If one VCR is disposed of, the new, disposed asset is assigned one item with a quantity of 1 and a cost of one-half of $400 or $200. It is assigned 1/5th of the basis, YTD, and LTD depreciation (one-half of 400 divided by 1000 = 200/1000 = 1/5).