Disposal

The Disposal menu provides functions for disposing of assets and reviewing obsolescence. Asset disposal is a financially significant operation — it removes the asset's remaining book value from the balance sheet and calculates any gain or loss on disposal. Understanding the financial implications before you dispose of an asset will help you avoid errors in your period-end journals.

Prerequisites

• You must be in the Fixed Asset Management profile (see Fixed Asset Management Profile).
• Ensure depreciation is up to date before disposing of assets. If you dispose of an asset mid-period without first calculating depreciation, the disposal gain/loss may be based on stale net book values.

Menu Overview

Disposed Inventory

The Disposed Inventory query lists all assets that have been disposed of, including financial information such as Original Value, Net Book Value at disposal, and any sale proceeds:

This list serves as the permanent audit trail for disposed assets. Records remain in the system indefinitely — they are not deleted.

Disposing of an Asset

To dispose of one or more assets:

1. Navigate to an asset list (for example, via Asset Register > By Category or the All Assets link).
2. Select the assets to dispose of using Shift+Click or Ctrl+Click.
3. Open the Actions on Selected Records menu and choose the dispose option.

Alternatively, press Delete on the keyboard with the target assets selected.

4. In the disposal dialog, enter the financial details:

Key fields in the disposal dialog:

5. Click OK to process the disposal.

Financial Impact of Disposal

When an asset is disposed of, the system automatically:

1. Writes off the remaining net book value — The difference between the asset's original cost and accumulated depreciation is removed from the balance sheet.
2. Calculates gain or loss on disposal — If sale proceeds were recorded:
   • Gain on disposal = Sale proceeds minus net book value (when proceeds exceed NBV)
   • Loss on disposal = Net book value minus sale proceeds (when NBV exceeds proceeds)
3. Creates disposal transactions in each book — These transactions are posted automatically and appear in the asset's transaction history.
4. Changes the asset status — The asset is moved to a "Disposed" status and no longer appears in the active asset register.

Warning: Disposal transactions are posted to the current accounting period. If you dispose of an asset after running depreciation but before producing journals, the disposal will be included in the current period's journals. If you dispose after producing journals, the disposal will appear in the next period.

Tip: Always review depreciation calculations before disposing of assets within the same period. This ensures the net book value used for the gain/loss calculation reflects up-to-date depreciation.

Correcting a Disposal

If an asset was disposed of in error, you cannot simply "un-dispose" it. The recommended approach is:

1. Post an adjusting transaction to reverse the disposal entries.
2. Change the asset's status back to "In Service" manually.
3. Review the depreciation setup to ensure calculations will resume correctly.

Contact your system administrator for assistance with reversals, as they may involve adjustments in your general ledger as well.

Low Specification Assets

The Low Specification Assets query identifies assets that may need replacement or upgrading based on their specifications:

The criteria for "low specification" are determined by the filter on this query, which can be configured to match your organisation's standards. Use this list as a planning tool to identify candidates for disposal or replacement before they fail in service.

Related Articles

• Asset Register — Browsing and finding assets
• Financial Transactions — Viewing disposal transactions on individual assets
• The Monthly Accounting Process — How disposals interact with period-end processing
• Valuations — Understanding net book value and other financial measures