Equipment disposal
Because end-of-life equipment no longer has a value in use, the disposal income should be deducted from the book value and related taxes and fees to the non-operating income and expenditure.
Accounting entries are:
1. Fixed assets transferred to liquidation:
Borrow: Fixed assets liquidation
Accumulated depreciation
Provision for impairment of fixed assets
Loan: Fixed Assets
2. Costs incurred in the process of liquidation as well as taxes payable:
Borrow: Fixed assets liquidation
Credit: Taxes payable
Bank deposits or cash on hand
3, liquidation to recover income:
Borrow: bank deposits
Credit: Fixed Assets Liquidation
4, the final balance of the fixed assets liquidation account in the debit side, it will be transferred to non-operating expenditures, and if the balance is in the credit side, then it will be transferred to non-operating income.
Fixed asset liquidation is due to wear and tear, suffered extraordinary disasters and accidents and the loss of production capacity, or because of obsolescence, must be eliminated to update the fixed assets, the appraisal, scrapping, write-off of assets, deal with the residual value of the work of the general term.
"Fixed assets clearance" is an asset account, used to account for the sale of enterprises, scrap and destruction of fixed assets transferred to liquidation of the value of fixed assets and in the process of liquidation of liquidation costs and liquidation income. Debit register fixed assets transferred to clean up the net value and clean up costs incurred in the process; credit register the sale of fixed assets to obtain the price, the value of salvage materials and the realization of income. The debit balance represents the net loss after liquidation; the credit balance represents the net gain after liquidation. After the liquidation of the net gain according to the assets have no value to the "non-operating income" or "gain or loss on disposal of assets" account; net loss to the "non-operating expenditures" account or The net loss is transferred to the account of "non-operating expenses" or "gain or loss on disposal of assets".
What is the difference between asset loss and retirement?
The difference between asset loss and scrap: scrap is the existence of the asset, but there is no value to be eliminated, is the loss of value of the asset; loss is due to loss, damage and other non-normal events caused by the loss of assets, loss of assets may be repaired and can continue to use or sell.