Disposing or selling an asset

When a fixed asset reaches the end of its useful life or is no longer needed, you must dispose of it by recording an Asset Disposal event in Usystems. This removes the asset from your balance sheet and records any gain or loss from the disposal in your general ledger, keeping your financial records accurate.

Before you start

• The asset must already be registered in Usystems (it should appear in your Fixed Assets list).
• You need permission to view and create fixed-asset transactions (typically logistics_admin group or equivalent).
• Decide the disposal method: sale (with a selling price), donation, or discard (at zero value).
• If selling the asset, know the sale price and the date of disposal.

Steps

1. Go to Fixed Assets in the top navigation. Open in Usystems

2. Find and click the asset you wish to dispose of from the list.

3. On the asset detail page, click Dispose Asset or Record Disposal (or a similar action button at the top of the page).

4. Fill in the Disposal Details form:

   • Disposal Date: Enter the date on which the asset was removed or sold.
   • Disposal Method: Choose from the dropdown:
     • Sale: The asset was sold. A selling price field will appear below.
     • Donation: The asset was given away at no cost.
     • Discard: The asset was scrapped or destroyed.
   • Sale Price (if applicable): If you selected "Sale," enter the amount received. Leave blank for donations or discards.
   • Notes (optional): Add any additional details (e.g., "sold to ABC Traders," "destroyed due to damage").

5. Click Submit or Record Disposal to complete the transaction.

6. Review the confirmation screen. Usystems will show:

   • The asset name and original cost.
   • Your accumulated depreciation to date.
   • The net book value at disposal.
   • The resulting gain or loss (if you sold it).

Accounting impact

When you record an asset disposal, Usystems posts the following entries to your general ledger:

• Debit: Accumulated Depreciation account (removes depreciation from your books).
• Credit: Fixed Asset account (removes the original cost).
• Debit or Credit: Gain/Loss account (records the difference between net book value and sale price).
  • If sale price > net book value → Credit Gain on Asset Disposal.
  • If sale price < net book value → Debit Loss on Asset Disposal.
  • If donation or discard → Full loss (net book value goes to Loss account).
• Debit: Cash or Receivables account (if you received money from the sale).

These entries ensure your balance sheet no longer shows the disposed asset and your profit & loss statement reflects any gain or loss from the disposal.

Tips & common mistakes

• Record the disposal promptly. Don't wait; remove the asset from your books as soon as it is sold or removed, otherwise your asset register will be inaccurate.
• Match the disposal date to your records. Use the actual date the asset left your possession, not the date you are recording the transaction.
• Selling vs. donation: If you receive even a small amount of cash, select "Sale" and enter that amount. Donations should be recorded at zero sale price.
• Check the gain/loss calculation. After disposal, review the resulting GL entries in your journal or trial balance to confirm the gain or loss amount is reasonable based on what you sold the asset for.