Today we will look at the Sale of Fixed Assets and how to separate the disposal on the trial balance. This makes the transactions visible for the Cash Flow financial statement.
Our goal is to isolate the proceeds based on algebraic calculation, rather than looking through Customer transactions to find the proceeds value.
We are going to set up the system so that the Netbook value and gain/loss on the sale appear on the trial balance report. Then the proceeds can be easily calculated.
Example: Gain/Loss – Net book value = Proceeds.
Chart of Accounts
Create the following accounts.
Make sure to assign the opening account on 170121 and 171121.
General ledger > Chart of accounts > Accounts > Main accounts
Account Name Type Opening Account
170120 Buildings Asset
170121 Buildings, disposal Asset 170120
171120 Accum Depr Buildings Asset
171121 Accum Depr Buildings, Recapture Asset 171120
890300 Gain/Loss on Sale of Fixed Asset Expense
Setup the Disposal posting profile for the following “Post value(s)”:
Depreciation (prior periods)
Depreciation (this year)
Net book value
Pay close attention and avoid typographical errors when entering the Main Account numbers.
Fixed assets > Setup > Fixed asset posting profiles > Disposal
3. Free Text Invoice
Now let us sell a Fixed Asset.
Choose your customer and amount you are charging for the sale, fill out the Main Account and Fixed Asset number as exhibited, and post.
Assign the 890300 Main Account to the Invoice lines.
Enter the Fixed Asset number that you are selling in the Line details.
Accounts receivable > Invoices > All free text invoices > New
(170121, 171121 890300) for the current year.
When you do a year-end close the disposed balances will automatically roll into the related Main Accounts (170120 and 171120) so you are ready for a new year of fixed asset sales.
4. Cash Flow Statement
Here is the magic.
We will edit the Financial Reporter row design to reflect the proceeds.
General ledger > Inquiries and reports > Financial statements > [select your Cash Flow statement] > Edit > Rows