Asset Disposal

Once the asset comes to end of life or is damages, then Asset Disposal module is used to either scrap or sell the Asset.

Create Asset Disposal Transaction:

To dispose the asset in HAL ERP, do the following:

1. Go the Menu

2. Asset Management -> Asset Disposal -> Create New

Below is the screenshot of Asset Disposal Form

Methods to Dispose Asset: There are 3 methods to dispose an Asset

1. Scrapped: If its damaged and non-usable 

2. Sold : If an asset is sold to external vendor or employee or anyone. 

3. Charity: If asset is given in charity with 0 value.

Method 1: SCRAPPED:

1. Select Date in which the Asset was / is scrapped.

2. Click on ADD ITEM -> Select the Asset and add it. After adding the asset it will appear in the TABLE (GRID).

3. Multiple Assets can be added in single transaction.

4. Select Method = SCRAPPED.

5. Enter Value = 0.

6. Select Customer Job & FIN AREA, so the respective Expense if Asset scrapped less than Net Book Value to hit in that Job (Project) or Cost Center (Fin Area). It's not mandatory to select.

7. Click ADD.

8. Now check the Ledger impacts in REPORTS SECTION in the same form.

Method 2: SOLD:

Scenario 1: Sold to employee / external vendor / anyone at Cash:

1. Select Date in which the Asset was / is scrapped.

2. Click on ADD ITEM -> Select the Asset and add it. After adding the asset it will appear in the TABLE (GRID).

3. Multiple Assets can be added in single transaction.

4. Select Method = SOLD.

5. Enter Value = Value at which Asset is Sold.

6. Select Customer Job & FIN AREA, so the respective Expense if Asset sold at less / more than Net Book Value to hit in that Job (Project) or Cost Center (Fin Area). It's not mandatory to select.

7. Select DEPOSIT TO = Any Bank / Cash / Petty Cash ledger in which amount is received

8. Click ADD.

9. Now check the Ledger impacts in REPORTS SECTION in the same form.

Scenario 2: Sold to employee and deducted from Salary in Loan Installments:

1. Select Date in which the Asset was / is scrapped.

2. Click on ADD ITEM -> Select the Asset and add it. After adding the asset it will appear in the TABLE (GRID).

3. Multiple Assets can be added in single transaction.

4. Select Method = SOLD.

5. Enter Value = Value at which Asset is Sold.

6. Select Customer Job & FIN AREA, so the respective Expense if Asset sold at less / more than Net Book Value to hit in that Job (Project) or Cost Center (Fin Area). It's not mandatory to select.

7. Select DEPOSIT TO = Any Clearing ledger.

8. Click ADD.

9. Now check the Ledger impacts in REPORTS SECTION in the same form.

10. After this create LOAN INSTALLMENT entry against Employee in LOAN MANAGEMENT Module. In Loan Management Module -> Pay from should be same Clearing Ledger used in Asset Disposal form.

Scenario 3: Sold to Vendor and deducted from a Payable:

1. Select Date in which the Asset was / is scrapped.

2. Click on ADD ITEM -> Select the Asset and add it. After adding the asset it will appear in the TABLE (GRID).

3. Multiple Assets can be added in single transaction.

4. Select Method = SOLD.

5. Enter Value = Value at which Asset is Sold.

6. Select Customer Job & FIN AREA, so the respective Expense if Asset sold at less / more than Net Book Value to hit in that Job (Project) or Cost Center (Fin Area). It's not mandatory to select.

7. Select DEPOSIT TO = Any Clearing ledger.

8. Click ADD.

9. Now check the Ledger impacts in REPORTS SECTION in the same form.

10. After this create Vendor Advance -> Type = DEBIT NOTE entry against Vendor in Vendor Advance Module. In Vendor Advance Module -> Pay from should be same Clearing Ledger used in Asset Disposal form. Then settle it against any Bills Payable entry or Purchase Invoice in Vendor Bill Payment screen.

GL IMPACTS of Asset Disposal

1. In case of Asset sold at loss or scrapped before depreciating its life:

It will DR = Accumulated Depreciation & Asset Loss Gain Ledger. 

It will also DR = Bank / Petty cash (Deposit TO field) if any amount is received.

It will CR = Asset Ledger.

2. In case if Asset sold at profit or scrapped after depreciating its life:

It will DR = Accumulated Depreciation.

It will also DR = Bank / Petty cash (Deposit TO field) if any amount is received.

It will CR = Asset Ledger & Bank / Petty Cash ledger.