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This chapter contains the following sections (each section starts on a new page):
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.
The conventions detailed below are applied when calculating the depreciation charge 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:
The link to the calculated depreciation charge will be restored after you have run the year end
procedure.
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.
The following section 'Year after disposal' explains this in more detail.
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'.
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)