NetAsset - Partial Disposal
Use Case: Circumstances may require the partial disposal of an asset before or after it’s been fully depreciated. In these instances, a disposal entry is required to remove the portion of the asset (and accumulated depreciation), settling any cash paid or received with an offset to the gain/loss account.
STEP BY STEP PROCESS
- Navigate to the NetAsset record to be disposed. An example asset record to be disposed of is shown here:
- Click Dispose and confirm your intent to navigate to the Dispose Assets page.
- Update the fields as necessary for the asset disposal:
| Field | Description | Example |
Period to Dispose Asset In | Enter the beginning of the period the asset is being disposed of in. | 05/01/2021 |
| Disposal Quantity | Enter the quantity of the asset to dispose of. Updating this field indicates a partial disposal. Disposal Amount - Gross will automatically adjust. | .5 |
| Disposal Amount - Gross | Enter the gross value of the asset or part of the asset to dispose of. Updating this field indicates a partial disposal. Disposal Quantity will automatically adjust. | 5,000.00 |
| Disposal Amount - Accumulated Depreciation | The accumulated deprecation balance being diminished as part of the disposal. | 246.92 |
| Disposal Amount - Net | The net book value of the quantity of the asset being disposed. | 4,753.08 |
| Cash Received to Dispose Asset | Input the amount to be received from the disposal. | 500.00 |
| Cash Paid to Dispose Asset | Input the amount to be paid in the asset disposal month. | 0.00 |
| Profit & Loss | The profit or loss to be had on disposal of the asset. | -4,500.00 |
| Gain/Loss Account | Optionally override the default Gain/Loss account for the Asset Type which will be impacted with the asset’s current Net Balance minus Cash Received plus Cash Paid | 7501 Gain on Vehicle Sale |
| Receivable/Payable Clearing Account | Optionally override the default Receivable/Payable Clearing account for the Asset Type which will be impacted with the Cash Received minus the Cash Paid | 1131 Sale of asset receivable |
Disposal Reason | Provide a brief description of the reason for the disposal. Your administrator may need to configure this list by creating NetAsset Disposal Reason records. | Scrap |
| Related Sale Transaction | Optionally enter the sale transaction related to the disposal. | Bill #15 |
Disposal Note | Provide any additional description or details for the disposal. | Excess supply and under-utilized; sold in auction |
- After double-checking inputs for the asset disposal, click Dispose. The Processing Status field will read Processing Disposal… while the schedule is being updated. Refresh periodically until the Processing Status field is blank.
- Once the disposal is complete and you’ll see the NetAsset Disposal Entry and removal of all subsequent depreciation schedule lines
- Click on the hyperlink to the NetAsset Disposal Entry and note that the journal entry reverses all cumulative balances in Fixed Assets (Gross) and Accumulated Depreciation accounts with the offset to Sale of Assets Receivables and the Gain/Loss account divided up based on the cash paid/received.
- Debit Asset Type’s Accumulated Depreciation Account for the asset’s current Accumulated Depreciation
- Credit Asset Type’s Fixed Asset Account for the asset’s current Gross Asset Value
- Debit Asset Type’s Sale of Assets Receivable/Payable Account for the Cash Received minus the Cash Paid
- Debit Asset Type’s Gain/Loss on Sale of Assets Account for the asset’s current Net Balance minus Cash Received plus Cash Paid