Hope someone can help, we bought a few years back a forklift that now has an asset value of £2,495. Its beyond economical repair and will be sold as scrap for £100. How do I record the loss of £2395 and reduce the asset value to zero.
TIA
Dave
Hello @projectessex
I found this in the forum which may help.
QF Steve, thanks for the prompt reply
All I would add to the above is that if you have issued (or intend to issue) a sales invoice for that £100 “sold as scrap” then you would make up the journal as if you were just writing it off completely, i.e. credit the asset code for the full original value, debit the accumulated depreciation code for the full depreciation, and debit “sale of assets” for the full net book value of £2495 to make it balance. Then when you make out the sales invoice for £100 click the ⛭ icon and assign the sales invoice line to the same “sale of assets” code. This will effectively cancel out £100 of the loss on disposal, leaving a net £2395 debit on “sale of assets”.
If sale of assets is still showing a debit balance by the end of your financial year then you might also want to journal that loss to an overheads code instead of it showing as reduced turnover.
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All I would add is that the “Sale of assets” code should be something more like “Gain or loss on disposal of assets”. It’s best to include it in overheads, in the same range as depreciation, rather than in revenue. Then it’s easily picked up as an adjustment on the tax return.
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