Difference between revisions of "How do I deal with fixed asset disposals?"
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m (Les Ward moved page How do I Deal with Fixed Asset Disposals? to How do I deal with fixed asset disposals?: Lower case (except for Platinum menu options)) |
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== Summary == | == Summary == | ||
| + | This article explains how to deal with the disposal of fixed assets. | ||
| + | |||
| + | == More Information == | ||
Disposals of Fixed Assets can be entered into the accounts using [[Posting journals|Journal Entries]], or you can use {{Menu|{{SL}}|Invoice/Credit Note}} if you want to produce an invoice for the disposal. | Disposals of Fixed Assets can be entered into the accounts using [[Posting journals|Journal Entries]], or you can use {{Menu|{{SL}}|Invoice/Credit Note}} if you want to produce an invoice for the disposal. | ||
| − | + | You will need to check you have all the required [[What is a nominal code?|Nominal Centres]] set up in Platinum, e.g. Disposals, Depreciation and Fixed Assets. You may need to seek advice from your accountant as to which centres to use and whether they should be treated as Profit & Loss or Balance Sheet Items. To create new nominal centres, follow [[How do I create a nominal code?|this]] article. | |
| − | You will need to check you have all the required [[What is a nominal code?|Nominal Centres]] set up in Platinum e.g. Disposals, Depreciation and Fixed Assets. You may need to seek advice from your accountant as to which centres to use and whether they should be treated as Profit & Loss or Balance Sheet Items. | ||
| − | As a rule of thumb, you will need to remove the Cost and Depreciation of the Fixed Asset from your Balance Sheet, and post these to a | + | As a rule of thumb, you will need to remove the Cost and Depreciation of the Fixed Asset from your Balance Sheet, and post these to a Balance Sheet Disposals of Fixed Assets nominal centre. The value that you get for the Disposal of the Fixed Asset should be posted into this code as one side of the entry either via a journal entry or a [[How do I produce a text invoice in Platinum?|sales invoice]]. The Profit or Loss on disposal should then be posted via a journal to a Profit & Loss code for Profit/Loss on Disposals. This may be a P&L Sales centre but seek advice from your accountant if you are unsure. |
| − | + | === Suggested Postings === | |
| + | * [[Posting journals|Journal]] the value of the asset to Credit the Fixed Asset Cost nominal centre and Debit the Fixed Asset Disposal nominal centre. | ||
| + | * Journal any depreciation to Credit the Fixed Asset Disposal nominal centre and Debit the relevant Fixed Asset Depreciation nominal centres (you may have used both the Current and Accumulated Depreciation centres). | ||
| + | * Raise a [[How do I produce a text invoice in Platinum?|sales invoice]] for the sale of the asset. Your [[How do I create a sales or purchase centre?|sales centre]] should link to the Fixed Asset Disposals centre. Alternatively post a [[Posting journals|journal]] for the sale, making sure you post any VAT element of the sale correctly. | ||
| + | * Journal the remaining balance in the Fixed Asset Disposal centre to the Profit & Loss. This will be a Credit to the P&L if you made a profit or a Debit to the P&L if you made a loss on the sale of the asset. You may need to create a Profit & Loss nominal centre for Profit/Loss on Disposals. | ||
== See also == | == See also == | ||
* [[Posting journals]] | * [[Posting journals]] | ||
* [[What is a nominal code?]] | * [[What is a nominal code?]] | ||
| + | * [[How do I create a nominal code?]] | ||
| + | * [[How do I create a sales or purchase centre?]] | ||
| + | * [[How do I produce a text invoice in Platinum?]] | ||
| − | {{KB_Tags|journal, disposal, asset, fixed}} | + | {{KB_Tags|journal, disposal, asset, fixed, depreciation}} |
| − | {{KB_NL}}{{ZN_Accounts}} | + | {{How}}{{KB_NL}}{{ZN_Accounts}} |
Latest revision as of 13:41, 19 March 2021
Summary
This article explains how to deal with the disposal of fixed assets.
More Information
Disposals of Fixed Assets can be entered into the accounts using Journal Entries, or you can use " Sales Ledger Invoice/Credit Note" if you want to produce an invoice for the disposal.
You will need to check you have all the required Nominal Centres set up in Platinum, e.g. Disposals, Depreciation and Fixed Assets. You may need to seek advice from your accountant as to which centres to use and whether they should be treated as Profit & Loss or Balance Sheet Items. To create new nominal centres, follow this article.
As a rule of thumb, you will need to remove the Cost and Depreciation of the Fixed Asset from your Balance Sheet, and post these to a Balance Sheet Disposals of Fixed Assets nominal centre. The value that you get for the Disposal of the Fixed Asset should be posted into this code as one side of the entry either via a journal entry or a sales invoice. The Profit or Loss on disposal should then be posted via a journal to a Profit & Loss code for Profit/Loss on Disposals. This may be a P&L Sales centre but seek advice from your accountant if you are unsure.
Suggested Postings
- Journal the value of the asset to Credit the Fixed Asset Cost nominal centre and Debit the Fixed Asset Disposal nominal centre.
- Journal any depreciation to Credit the Fixed Asset Disposal nominal centre and Debit the relevant Fixed Asset Depreciation nominal centres (you may have used both the Current and Accumulated Depreciation centres).
- Raise a sales invoice for the sale of the asset. Your sales centre should link to the Fixed Asset Disposals centre. Alternatively post a journal for the sale, making sure you post any VAT element of the sale correctly.
- Journal the remaining balance in the Fixed Asset Disposal centre to the Profit & Loss. This will be a Credit to the P&L if you made a profit or a Debit to the P&L if you made a loss on the sale of the asset. You may need to create a Profit & Loss nominal centre for Profit/Loss on Disposals.
See also
- Posting journals
- What is a nominal code?
- How do I create a nominal code?
- How do I create a sales or purchase centre?
- How do I produce a text invoice in Platinum?
