Disposing of or writing off a fixed asset

An asset leaves the company’s holdings when it is sold (disposal) or written off (destroyed, unusable, stolen). By the end of this page, you will know how to record the disposal, read the entries produced and avoid account errors.

Prerequisites

• The asset has the Active status.
• The Administrator or CFO role.
• An open fiscal year covers the disposal date.
• For a sale: the sale price and how it is received (bank, cash, or a receivable from the buyer).

Recording the disposal

1. In Assets → Fixed assets, open the asset record and click Dispose. The Dispose asset window recalls the Gross value and the Register No.

2. Disposal type: Disposal (sale) or Write-off (destruction).

3. Disposal date: the actual date of the sale or write-off.

4. For a sale only:

   • Sale price;
   • Counterpart account: the account that receives the price (see the table below). SynkriaOps shows the estimated gain or loss.

5. Reason: why the asset is leaving (sale, obsolescence, damage…).

6. Click Confirm disposal.

The price is…	Counterpart account
Received in the bank	521xxx Banks
Received in cash	571xxx Cash
Owed by the buyer (deferred payment)	485 Receivables on disposals of fixed assets

The field hint swaps bank and cash

The example shown in the Counterpart account field mentions “571 bank” and “521 cash”. In SYSCOHADA, 521 is the bank and 571 the cash register. For a sale on credit, prefer 485 to the customer account 411, which is reserved for sales from ordinary activities.

Irreversible operation

The asset moves to the Disposed or Written off status and its record can no longer be edited. The entries are posted as soon as they are created. If your company has an approval circuit on disposals, the message “The disposal was submitted for approval” appears: the asset remains in service until the request is approved.

What SynkriaOps records

The entries are recorded in the Fixed assets journal (IMM) on the disposal date.

1. Additional depreciation. Depreciation for the current period is calculated up to the disposal date and posted (debit 681x, credit 28xx). Depreciation planned after the disposal is cancelled.

2. Removal of the asset. The gross value leaves the asset account and the accumulated depreciation is cleared. The 81x account then carries the net book value (NBV).

Entry	Debit	Credit
Removal of the gross value	812 Book value of disposed assets	2xxx Asset account
Clearing accumulated depreciation	28xx Accumulated depreciation	812 Book value of disposed assets

3. Sale price (sale only).

Entry	Debit	Credit
Recording the price	Chosen counterpart account	822 Proceeds from disposals

The gain or loss is read as the difference between 822 (price) and 812 (NBV) in the income statement, under extraordinary items (HAO, hors activités ordinaires).

4. Derogatory depreciation (if enabled). The asset’s derogatory depreciation balance is written back: debit 151, credit 861 in SYSCOHADA.

Check the disposal accounts on the record

The default accounts are 812 and 822 (tangible assets) for a sale, and 813 for a write-off. 813 does not exist in the revised SYSCOHADA chart of accounts: a write-off is recorded as a sale at zero price, in 812. For software or another intangible asset, use 811 and 821. These accounts are chosen in Advanced accounts when the record is created.

Worked example

A vehicle bought for 6,000,000 XAF, depreciated by 4,500,000 XAF at the disposal date, is sold for 2,000,000 XAF by bank transfer.

Account	Debit	Credit
812 Book value	6,000,000
245 Transport equipment		6,000,000
2845 Accumulated depreciation	4,500,000
812 Book value		4,500,000
521 Bank	2,000,000
822 Proceeds from disposals		2,000,000

Account 812 shows a debit balance of 1,500,000 XAF (the NBV) against 822 at 2,000,000 XAF: the gain on disposal is 500,000 XAF.

Attaching supporting documents

Before disposing of the asset, add the sale invoice or the write-off report in the record’s Attachments tab. The record remains available after the disposal, with its history.

Frequent messages

Message	Cause	Solution
”Sale price is required”	Sale without a price	Enter the price (0 is not accepted: use a write-off)
“Counterpart account is required for a sale”	No account chosen	Choose the account that receives the price
”Asset is not ACTIVE”	Asset under acquisition, to complete or already disposed of	Put the asset into service or complete its record
”A disposal of this asset is already awaiting approval…”	A disposal request is waiting for a decision	Wait for the decision or recall the request

See also

• Depreciation schedules & charges →
• Create a fixed asset →
• Reconciliation, export and financial statements →
• Income statement →