New Fixed Asset Disposal Form
The Fixed Asset Disposal form is used to remove an asset from the company's books, typically due to the asset being sold, scrapped, or lost. This process ensures that the asset's value is removed from the balance sheet and any resulting profit or loss is recorded.
You can access this page by navigating to Fixed Asset Module > New Button > Disposal.
Disposal Header & Item Selection
- Location: Select the physical site from which the asset is being removed. The system verifies the Quantity on Hand (QOH) at this location before allowing the disposal.
- Date: The date the disposal is officially recorded. This date is used for the GL journal entry.
- Reference: The unique document number for the disposal note, typically auto-generated for audit consistency.
- Fixed Asset Item: Select the specific asset to be disposed of.
- Quantity: The number of units being removed. For unique fixed assets, this is usually 1.
Financial & GL Integration
When you process a disposal, the system automatically generates General Ledger entries based on the following logic found in the system files:
- Asset Account (Credit): The system identifies the Inventory/Asset Account linked to the item. This account is credited for the full standard cost of the asset, reducing your total asset value on the balance sheet.
- Disposal/Loss Account (Debit): As per the code logic, the system uses the "Default Loss on Asset Disposal Account" configured in Company Preferences. This account is debited to record the value of the asset being written off.
- Inventory Adjustment Account (Debit/Credit): The system also involves the standard adjustment account to balance the stock movement, ensuring the physical inventory and the financial ledger remain synchronized.
Operational Controls
- Standard Cost: A read-only field (unless the user has specific permissions) showing the current book value per unit of the asset.
- Memo/Comments: A mandatory or optional text area to record the reason for disposal (e.g., "Sold to Third Party," "Damaged beyond repair").
- Product Image / Attachment: An integrated dropzone where you can upload supporting documents, such as a sale receipt, a police report (for stolen assets), or a photo of the scrapped item.
- Custom Fields: Any additional data points required by your finance team, such as "Buyer Name" or "Disposal Method."
Action Buttons
- Add Item: Adds the selected asset to the disposal list. Multiple assets can be disposed of in a single transaction.
- Process Disposal: Finalizes the transaction. This action performs the "add_stock_disposal" function in the database, which creates the GL journals and marks the asset as removed from inventory.
- Update / Cancel: Allows for modifications to the list before final processing.