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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

  1. Go to Accounting → Assets and open the asset you're disposing of.
  2. Click Sell or Dispose (the button label varies).
  3. 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)
  4. 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.