Disposing of an asset
When you sell, scrap, or replace a business asset — maybe you upgrade your display cases, replace a broken safe, or sell your old POS terminals — you need to record the disposal so your books reflect reality.
Types of disposal
- Sale — you sell the asset to someone else (e.g., selling old display cases to another dealer for $500)
- Scrap/Write-off — the asset is worthless or damaged beyond repair and you're getting rid of it
- Trade-in — you're applying the old asset's value toward a new purchase
Recording a disposal
- Go to Accounting → Assets and open the asset you're disposing of.
- Click Sell or Dispose (the button label varies).
- Enter the disposal details:
- Disposal Date — when you sold or scrapped it
- Sale Value — how much you received for it ($0 if scrapped, the sale price if sold)
- Click Confirm.
What CloudFFL OS calculates
When you dispose of an asset, the system automatically calculates the gain or loss:
- Book value at disposal — the original cost minus all depreciation that's been posted so far
- Sale price — what you received
- Gain or loss — the difference
For example, if your display case originally cost $4,800, has been depreciated for 3 years ($57.14 × 36 = $2,057.04 in depreciation), the book value is $2,742.96. If you sell it for $1,500:
- Book value: $2,742.96
- Sale price: $1,500.00
- Loss on disposal: $1,242.96
CloudFFL OS creates journal entries to remove the asset from your books and record the gain or loss.
Gains and losses on asset disposal affect your taxes. A loss reduces your taxable income; a gain increases it. Your accountant will include these on your tax return. Make sure you record disposals in the correct tax year — if you sell a fixture in December, don't wait until January to record it.
What about fully depreciated assets?
If an asset has been fully depreciated (book value = $0) but you're still using it — like a 10-year-old safe that's still perfectly good — you don't need to do anything. It stays on your books at $0 value with no monthly depreciation. Only record a disposal when you actually get rid of it.
If you sell a fully depreciated asset for any amount, the entire sale price is a gain. Sold that old safe for $300? That's a $300 gain on disposal.