0
The "retirement" or "disposal" (as it's usually listed as) is recorded in a couple of different ways depending on how the asset is disposed of. One entry that will not change regardless of how the company disposes of the asset is the account related to said asset.
For example, if the company is disposing of a truck, the one account entry that will not change will be Equipment-truck, this account will be credited for the balance. The fact that the fixed asset account has a debit balance, we now credit the account to bring it to a zero balance and remove the truck from our records.
Company's may choose to dispose of, sale, or trade the fixed asset. Disposing of the fixed asset does not involve the exchange of money or another asset. Selling of the asset involves receiving cash for the asset. Trading involves receiving another asset in exchange for the asset the company is disposing of.
This transaction will affect the balance sheet as it affects the assets of a company.
Add your answer:
Earn +20 pts
Is the fair value of an asset retirement obligation recorded as an increase to the related asset and as a liability?
Is it true the fair value of an asset retirement obligation recorded as an increase to the related asset and as a liability?
Is Notes receivable asset or liability?
It is recorded as an asset.
When is a gain on disposal of an asset recorded?
A gain is recorded when the asset is sold for a price greater than the assets book value.
Is carpet an asset?
It as a Fixed Asset if it is not for resale purposes and is used for more than 1 accounting period. But it might not be recorded in the B.S as a Fixed asset if the company feel that the figure is immaterial enough to be recorded. (It does not affect decisions of stakeholders).
Do asset allocation funds affect my retirement plans?
Asset allocation funds should be available to everyone.Most brokers have this program. Asset allocation funds will not only minimize the risk but also optimize your return.
Why losses are recorded on the asset side of balance sheet?
its a loss
What is the Journal entry move land out of current assets?
Land is not a current asset and if recorded as current asset then no entry required to re-classify as fixed asset.
In accounting do you depreciate the installation of a fixed asset?
In accounting the "installation" if you are referring to the cost of having something installed is an expense and is recorded as such, that is an operating expense and is recorded as such. Since it is an expense it is not an actual asset, so can not be depreciated.
What is a cost of an asset minus the accumulated depreciation is?
There are a number of names for this figure,Book valueCarrying amount Essentially, it is the amount that your asset is recorded in your books as.
Which intangible asset is recorded only as a part of the acquisition of another company?
goodwill
Which intangible asset is recorded only as part of the acquisition of another company?
goodwill
What does ARO mean in accounting?
ARO in regards to accounting means "Asset Retirement Obligation" liability and is referenced in SFAS 143.
