Disposal of a fixed asset

This article guides you how you can dispose your fixed assets in just a few steps.

Setting Up for Accounts

You will need to create the following accounts to record disposal of your assets. You can add the accounts under Accounting -> Chart of Accounts -> + New.

Note: You may also combine Gain on Disposal and Loss on Disposal accounts into one Income account “Gain/Loss on Disposal”.

Recording the Sales Transaction

The first step into disposing your asset is to record the sales, you may skip this step if you are just writing off the assets or not disposing for money.

1. Navigate to Sales -> Invoices.
2. Click + New.
3. Key in customer details, date and other info.
4. Add a line item:
   1. Put in a description for the item you are disposing. (eg. MacBook Air (2021))
   2. Select Sales Income (or equivalent) for Account. (Don’t worry so much about this, the amount will be contra’ed at the disposal transaction later)
   3. Enter the Amount you are disposing the asset for. (eg. 2000)
5. Add at least one line to the Payment Term.
6. Click Save.

Recording the Disposal

1. Go to Accounting -> Fixed Assets.
2. Click on the View button beside the asset you are looking to dispose.
3. Look for the Dispose button on the top right.
4. Key in the Dispose Date, this should follow date you put in for the sales invoice earlier (if any).
5. Enter the Sale Price, this should be the same with the invoice amount (if any). Put 0 if you are writing off the asset.
6. Select the Sale Account following the Income account you used in the invoice earlier.
7. Select Last Depreciation mode:
   • End of Last Financial Year: If you only want the asset to depreciate until end of your last financial year.
   • The Following Date: If you want to depreciate the asset until a specific date.
8. Select Capital Gain on Disposal (or equivalent) under Capital Gain Account.
9. Select Gain on Disposal (or equivalent) under Gain Account.
10. Select Loss on Disposal (or equivalent) under Loss Account.
11. Click Save.

And you have the asset disposed!

Undo a Disposal

If a disposal is done by a mistake, you may follow the steps to undo a disposal.

1. Go to Accounting -> Fixed Assets.
2. Click on Disposed tab.
3. Click on the View button beside the asset you are looking to undispose.
4. Click on the Undispose button on the top right.
5. Confirm by clicking OK.