Disposal of fixed assets
Fixed assets in operationare subject to deterioration, obsolete morally and physically, are bought, sold, exchanged, transferred for various reasons to third-party organizations. 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
- Contribution to the charter capital of a third party organization
In order to determine the feasibilityunfit a fixed asset, a commission is created, which includes equipment specialists, engineers, chief accountant. They inspect and determine the reason for writing off the fixed asset, identify the perpetrators, 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 accounting department.
Basic operations on retirement of fixed assetsreflect the write-off of the object at its original cost. When the object is sold, the residual value is written off, the amount of accrued depreciation, the amount of VAT payable is taken into account, and the netting of liabilities 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 a subaccount of 01/1- the retirement of fixed assets and makes the posting: D-01 / K 02 on the amount of accrued depreciation and D-01 K 01/1 for the amount of the original value. Then the account of 01/1 accumulates the residual value of the fixed asset, which is written-off to the account 91 upon retirement.
When selling and leasing the fixed assets, the result from the retirement of fixed assets will credit the proceeds from the sale to the profit account.
The retirement of fixed assets accounts for the remainingmaterial values after dismantling and disassembling the object. Materials come at market prices. When decommissioning fixed assets after accidents, fires and other natural disasters, it is necessary to take into account that partially losses are compensated 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 primarydocuments - an act to write off OS-4 during liquidation, write-off due to 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 the leased object and when moving inside the shops and other divisions of the enterprise, the invoice for internal movement is filled, but such movements are not retirement of fixed assets.
Always disposal of fixed assets requiresadditional costs that are reflected in the form of expense transactions and collected on account 23, or immediately at 91 accounts. That is, under the credit of the account 10, 68, 69, 70, and under the debit account 91, the sub-account is other expenses. All transactions related to the profit from the proceeds of 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 incomes.
Both incomes and expenses on retirement of fixed assetsare always reflected in the current reporting period. Account 91 collects the financial result from the disposal of objects 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 stored at the enterprise for at least five years.