Partial disposal examples—Fixed Assets Management

Use these examples to understand how partial disposals affect asset balances and financial reporting for both depreciable and non-depreciable assets. The examples include formulas, sample calculations, updated depreciation schedules, and the resulting disposal journal entries.

Formulas

• Depreciable cost = Asset cost − Salvage value

• Total accumulated depreciation = Sum of all Posted and Historically posted entries

• Remaining accumulated depreciation = Total accumulated depreciation − Sum of partial accumulated depreciation amounts from previous partial disposals

• Partial accumulated depreciation = (Remaining accumulated depreciation ÷ (Asset cost − Sum of previous partial disposal amounts)) × Partial disposal amount

• Partial remaining depreciation = Partial disposal amount − Partial accumulated depreciation

• Gain or loss amount for partial disposal (depreciable asset) = Sales price − Partial remaining depreciation

• Gain or loss amount for partial disposal (nondepreciable asset) = Sales price − Partial disposal amount

• Total remaining depreciation = Depreciable cost − Total accumulated depreciation − Sum of partial remaining depreciation

Full disposal formulas after partial disposals:

• Remaining asset cost = Asset cost − Sum of previous partial disposal amounts

• Remaining accumulated depreciation = Total accumulated depreciation − Sum of partial accumulated depreciation amounts from previous partial disposals

• Gain or loss amount (depreciable asset) = Sales price − (Remaining asset cost − Remaining accumulated depreciation)

• Gain or loss amount (nondepreciable asset) = Sales price − Remaining asset cost

Depreciation schedule calculations

When you partially dispose of an asset, Fixed Assets Management recalculates any unposted depreciation entries. It follows the asset's original depreciation method, but uses the following values in the calculation:

• Depreciable cost = The new total remaining depreciation

• Useful life = The number of unposted periods

• In-service date = The partial disposal date

Example: Depreciable asset

Scenario:

• Asset cost: $10,000.00

• Salvage value: $100.00

• In-service date: December 30th, 2024

• Depreciable cost: $9,900.00

• Total accumulated depreciation: $825.00

• Remaining depreciation: $9,075.00

• Depreciation method: Straight line

Schedule:

Example: Non-depreciable asset

Scenario:

• Asset cost: $10,000.00

• Salvage value: $100.00

• In-service date: December 30th, 2024

Example: Reversal

When a partial disposal is reversed, Fixed Assets Management creates a reversal journal entry that mirrors the original partial disposal journal entry. The debit and credit amounts are reversed to offset the accounting impact of the original partial disposal. The depreciation schedule is also restored to its state before the partial disposal.