Dispose of Fixed Asset

This procedure is used to record the disposition of a fixed asset and create accounting transactions for this.

You record an asset as disposed when it is discarded and cannot be used any longer.

Outcome

The fixed asset is recorded as disposed of. The general ledger is updated with the account entries created and a journal with the entries. The fixed asset file is updated and the asset is assigned status 9='Sold or disposed fixed asset'.

Note: If the asset was split during disposal, the original asset will remain active and receive a quantity that is the sum of the original quantity minus the disposed quantity. The new asset identity specified during disposal will receive status 9='Sold or disposed fixed asset' and the disposed quantity.

Before you start

The fixed asset must be defined and assigned status 1='Normal FA' in 'Fixed Asset. Open' (FAS001).
Parameters for fixed asset disposition must be set in 'Settings - Fixed Asset Disposition' (FAS945). In (FAS945), you specify which depreciation types to use for disposal of fixed assets and you also connect type to the depreciation type.
Accounting rules for accounting event FA40 (Disposition) must be defined in 'Accounting Rule. Set' (CRS395).
At least one detail record must be defined under accounting event FA40 (Dispose) in 'FAM Function. Open' (CRS405).

Follow these steps

Start 'Fixed Asset. Dispose' (FAS145/B).
On the A panel, specify the fixed asset to be disposed of, including the subnumber. Press Enter.
On the B panel, information about the depreciated amount, remaining amount and the value type used is displayed for the depreciation type. If the information is correct, press F14='Dispose'.
On the E panel, specify the accounting date and the voucher text and report text.
Review the asset quantity displayed. Select one of these alternatives:

To dispose the entire asset, press Enter.
To dispose only parts of the asset, specify the quantity to dispose and press Enter. Specify a new fixed asset identity that will be used for the disposed part of the asset, including subnumber and press Enter.

Disposing of Fixed Asset with Corporate Accounting and Reporting Activated

Multiple vouchers are created when a fixed asset is disposed.

The book of account that is set up in (CRS406) for FA40 is used for the total acquisition cost reversal voucher. The voucher series used by this FAM function must be connected to a 0-'Common' voucher type.

Depreciation-specific transactions such as adjustments, depreciations, or impairments are written on vouchers according to the accounting ledger updated by the depreciation type.

With corporate accounting and reporting additional features for fixed assets, impairment or extraordinary depreciation now creates a different accounting line.

The voucher number and journal number that are to be retrieved are dependent on the period type used in the division.

For accounting ledger or fixed asset-specific transactions, additional information 40 is also created for all the generated vouchers when the fixed asset is disposed of.

Note that FA51-Acquisition reversal is not used when a fixed asset is disposed.