Dispose of an asset—Fixed Assets Management

Fully dispose of an asset when your organization no longer has possession of it or it’s removed from service. Only assets that are in service can be disposed of.

When you dispose of an asset, Fixed Assets Management performs the following actions:

• Changes the asset's state to Disposed.

• Calculates the gain or loss amounts and creates disposal journal entries.
  

• Records the disposal in the Disposal details section on the asset and on each depreciation schedule.

• Changes the state of depreciation schedule entries that were not posted yet to Canceled.

Before you begin

• Post all depreciation schedule entries that are on or before the disposal date.

• Verify the asset is in-service. If not, you can place the asset back in service.

• If the asset is inactive, set its status to active.

• If an asset is non-depreciable, set a journal for non-depreciable asset disposal in Fixed Assets Management configuration.

Dispose of an asset

1. Go to Fixed Assets Management > All > Assets.

2. Find the asset that you want to dispose of.

   The asset's state must be In service.

3. Select the asset's name to view it.
   

4. At the top right of the page, select Dispose.

   The GL accounts in the Dispose dialog are for informational purposes only. Administrators can change the Gain or loss GL account in Fixed Assets Management configuration.

5. Select a Disposal date.
   

   Disposal date requirements

   The disposal date must meet the following requirements:

   • Be after the in-service date.

   • Be on or after the most recent partial disposal date, if any.

   • Be after the most recent transfer date, if any.

   If no depreciation has been posted, the disposal date must also meet the following requirements:

   • Be before the scheduled posting date of the first not posted depreciation entry across all schedules.

   If depreciation has been posted, the disposal date must also meet the following requirements:

   • Be after the actual posting date of the most recently posted depreciation entry across all schedules.

   • Be before the scheduled posting date of the next not posted depreciation entry across all schedules.

   Example 1: No posted depreciation

   In the following scenario, the valid disposal dates are from August 2nd to August 30th.

   In-service date: August 1st

   Example 1: Depreciation schedule

   Period	Scheduled posting date	Actual posting date	State
   1	August 31st	--	Not posted
   2	September 30th	--	Not posted
   3	October 31st	--	Not posted
   4	November 30th	--	Not posted
   5	December 31st	--	Not posted

   Example 2: Posted depreciation

   In the following scenario, the valid disposal dates are from December 1st to December 30th.

   In-service date: August 1st

   Example 2: Depreciation schedule

   Period	Scheduled posting date	Actual posting date	State
   1	August 31st	--	Historically posted
   2	September 30th	--	Historically posted
   3	October 31st	October 31st	Posted
   4	November 30th	November 30th	Posted
   5	December 31st	--	Not posted

6. Select a Disposal type for the reason of disposal.
   

   Types of disposals

   • 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.

7. If the disposal type is a Sale, enter a Sales price.

   If the Sales price is greater than zero, a Disposal GL account is required. The Disposal GL account is defined on the asset.

   What's a Disposal GL account?

   The General Ledger account where the Sales price is recorded as a debit during asset disposal. Typically, it is a depreciation expense account, a gain and loss account, or some other special disposal account.

   If the Disposal GL account is the same as the Gain or loss GL account, there will only be one journal entry for that account during disposal.

8. Optionally, enter any comments about the disposal.
   

   For example, you can note who you sold the asset to, provide context, or include reference numbers.

9. Select Save.

You can view the gain or loss amount and disposal journal entry in the Disposal Details section of the depreciation schedules. For non-depreciable assets, this information appears in the Disposal Details section on the asset.

Assets depreciating under the Daily method have additional changes that occur after disposal. Learn about daily method disposals here.