Fixed Asset Program Manual

Fixed Asset Disposals

Fixed Asset Program Manual Copyright 2013 Rupert Parsons This document is licensed under the Creative Commons Attribution Share Alike License version 3. You may copy, distribute and/or modify it under the conditions stipulated in the copyright licence. Click the link below to view the details of the copyright licence which applies to this publication: http://creativecommons.org/licenses/by-sa/3.0/deed.en

Rupert Parsons 2013

Introduction
This chapter contains the following sections (each section starts on a new page): In the year of disposal The year after disposal

Rupert Parsons 2013

In the year of disposal

Go to the row of the fixed asset which has been disposed. Go to Date of Disposal (column X). Enter the date of disposal in the yellow cell. (use the short date format for your country e.g. 12/02/2012).

Important: When you enter the date of disposal the program will automatically reverse the cost and accumulated depreciation of the asset:

Do not enter the disposal adjustments in the cost & depreciation adjustment cells. The program assumes that you are disposing of the entire asset. Dealing with part disposals is explained at the end of this section. If a disposal date is entered before the accounting period, the program ignores the disposal date. If the disposal date is after the accounting period, this will result in an input error. The following pages explain how depreciation is calculated if the fixed asset is disposed before the end of its useful life and how to deal with part disposals.

Rupert Parsons 2013

If the fixed asset is disposed before the end of its estimated useful The conventions detailed below are applied when calculating the depreciation charge in the year of disposal. If full depreciation was charged in the year of purchase: No depreciation is charged in the year of disposal. If partial depreciation was charged in the year of purchase and the month of purchase was included: Partial depreciation is charged in the year of disposal up to but excluding in the month of disposal. If partial depreciation was charged in the year of purchase and the month of purchase was excluded: Partial depreciation is charged in the year of disposal up to and including the month of disposal. You can override the calculated depreciation charge in the year of disposal if you want to apply a different convention: Go to Depreciation charge in accounting period (column V). Select the depreciation charge of the disposed asset. Unprotect the worksheet (there is no password). Enter (overwrite) the depreciation charge. Protect the worksheet (without a password).

The link to the calculated depreciation charge will be restored after you have run the year end procedure.

Rupert Parsons 2013

Part Disposals If only part or some of the asset(s) registered are disposed of, the fixed asset should be deleted and re-entered in the program such that the part disposed and the part that remains are registered separately. This will ensure that the movement of cost and accumulated depreciation due to the disposal are shown correctly and any annual depreciation is correctly calculated. How to delete and re-enter the asset is explained below. To delete the fixed asset: Select any cell of the fixed asset. Click the button 'Delete Row'. The following section 'Year after disposal' explains this in more detail. To re-enter the fixed asset: Click the button 'New Row' twice to create 2 new rows. (one row is for the disposed element of the asset, the other row is for the asset(s) that remain) In one of the newly created rows, enter the details for the disposed element of the asset including the disposal date and accumulated depreciation brought forward*. In the other newly created row, enter the details for the asset(s) that has not been disposed of including accumulated depreciation brought forward*. *Entering depreciation brought forward is explained in the section 'Prior Year Adjustments' of the chapter 'Prior Month & Year Adjustments'.

Rupert Parsons 2013

The year after disposal

In the following year (after you have run the year end procedure): Select any cell of the fixed asset which was disposed of in the previous year. Click the button 'Delete Row'. (A message appears to confirm that you have selected a cell of the row you want to delete. Another message appears to confirm that you want to delete this fixed asset)

Rupert Parsons 2013