How to record the sale of a fixed asset in your chart of accounts

anitaganzer

Hi,

Recently sold a fixed asset listed in my chart of accounts. Sold for less than price paid so how do I go about recording the sale and then clearing out the asset to zero? E.g. Asset value $50,000, sold for $45,000, balance of $5,000 (is this a write-off?). Thanks in advance!

Acctd4

The difference between an asset's cost & its sale price will either be a gain (which would need to be declared as income) or a loss. Depending on when you purchased it, there may also be depreciation over its effective life to factor in.

I'd suggest looking at the tax return for the FY in which you purchased it in order to determine if it was fully expensed (eg the full net cost was claimed at the time) or being depreciated. Depending on the nature of the trading entity & the asset holding, the loss may need to be carried forward until it can be applied to a future capital gain.