Disposal of fixed assets

Fixed assets in the process of exploitation are subject to wear and tear, they become obsolete morally and physically, they are bought, sold, exchanged, transferred to other organizations for various reasons. The retirement of fixed assets in organizations occurs as a result of:

• Realization of fixed assets
• Elimination in case of accidents, natural disasters, thefts
• Write-offs, in connection with their further unfitness
• Transfers at no charge
• Leasing of fixed assets in leasing
• Contributions to the charter capital of a third party organization

In order to determine the appropriateness of the unfit for a fixed asset, a commission is created, which includes specialists in equipment, engineers, chief accountant. They inspect and determine the reason for writing off the fixed asset, identify the guilty persons, consider the possibility of further use of the details of the decommissioned facility, monitor the removal of precious metals from them. Then they compose an act for writing off, which is signed by the members of the commission, approved by the head and transferred to the accounts department.

The basic operations for the retirement of fixed assets reflect the write-off of the object at its original cost. When the object is sold, the residual value, the amount of accrued depreciation is written off, the amount of VAT from the proceeds is taken into account, and the offsetting of the obligations is carried out at the agreed cost. In accounting entries, depreciation of the depreciated value, the amount of accumulated depreciation and all costs associated with the retirement of the fixed asset during write-off, liquidation, and transfer are recorded.

So on account 01 the accountant allocates the subaccount 01/1 - the withdrawal of fixed assets and does the posting: D-01/1 K 02 0a the amount of accrued depreciation and D-01 K 01/1 for the amount of the original value. Then on the account 01/1 the residual value of the fixed asset is accumulated, which at the disposal is debited to account 91.

When selling and leasing the fixed assets, the result from the disposal of fixed assets will credit the proceeds from the sale to the profit account.

The retirement of fixed assets takes into account the remaining material values after dismantling and disassembling the facility. Materials come at market prices. When decommissioning fixed assets after accidents, fires and other natural disasters, it is necessary to take into account that, in part, losses are reimbursed at the expense of insurance organizations, at the expense of reserve capital and at the expense of guilty persons for theft or shortage.

The disposal of fixed assets by primary documents is issued - an act to write off OS-4 upon liquidation, write-off in connection with the impossibility of its further use. When selling, transferring to the authorized capital, with gratuitous transfer as a gift of fixed assets, an act of acceptance-transfer of OS-1 is drawn up. When returning a leased object and when moving inside workshops and other business units, a waybill is filled in for internal movement, but such movements are not retirements of fixed assets.

Always retirement of fixed assets requires additional costs, which are reflected in the form of expense transactions and collected on account 23, or immediately at 91 accounts. That is, on the credit of the account 10, 68, 69, 70, and on the debit account 91, the sub-account other expenses. All operations related to the profit from the proceeds from the sale of the objects are reflected in the accounts 50, 51, 62 on the debit and 91 on the credit on the subaccount other income.

Both income and expenses for the retirement of fixed assets are always reflected in the current reporting period. Account 91 collects the financial result from the disposal of assets in the organization. If the credit of the account is greater than the debit, then the enterprise has a profit, and if less - the loss. The financial result from the retirement of fixed assets from account 91 at the end of each month is written off to account 99.

With the retirement of fixed assets in the inventory card, a corresponding note is made on removing them from the account. Cards are kept at the enterprise for at least five years.