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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Accounting entry for F...
Finance | Project Operations, Human Resources, ...
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Accounting entry for Fixed Asset Sale / Scrap

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Posted on by MYGz 2,059

Hello,

I was understanding the accounting entry for Fixed Asset Sale/Scrap. I am little confused. Here is my entry:

pastedimage1629601719351v1.png 

In case of Sale, Fixed Asset Acquisition - NBV = Sale +/- Gain Loss

In case of Disposal Fixed Asset Acquisition - NBV = Disposal

Is this correct understanding? Is this how the entry is created in D365 F&O when we sale or scrap a Fixed Asset?

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  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Accounting entry for Fixed Asset Sale / Scrap

    Hi MYGz,

    In the MS Contoso demo companies you find a setup that reverses the previously recorded transactions on the depreciation and 'accumulated' accounts.

    This makes sense based on the setup that is made there and which records the asset values 'gross' on separate accounts; first on accumulated depreciation/revaluation/write up/write down / .... accounts in your balance sheet and second on P&L accounts in your Income Statement.

    That's one possibility how to record those transactions, which makes much sense if you have to report fixed asset and accounting values e.g. based on IFRS.

    Yet, you can also summarize the postings on single accounts that hold the acquisition and 'accumulated' amounts and make much simpler postings. Sometimes, smaller companies that have to follow local accounting standards prefer this setup because its easier.

    Hope this helps.

    Best regards,

    Ludwig

  • MYGz Profile Picture
    MYGz 2,059 on at
    RE: Accounting entry for Fixed Asset Sale / Scrap

    Hello Ludwig,

    The examples are generic in context of D365 F&O. Maybe you can throw some light on best practices in D365 F&O.

    I was writing sample accounting entry for Fixed Assets sale and Fixed Asset Scrap according to my understanding.

    Depreciation and Accumulated Depreciation will be reversed.

    The FA sale accounting entry equation will be: 

    Asset Acquisition - NBV = Sale +/- Gain Loss

    The FA disposal accounting entry equation will be:

    Asset Acquisition - NBV = Disposal (in case of disposal NBV = Disposal/Sale)

     

    Regards,

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Accounting entry for Fixed Asset Sale / Scrap

    Hello MYGz,

    There are different possibilities how you can setup the ledger posting for fixed asset sales scrap.

    The examples that you shared above, are they from your company's setup, from the MS demo companies or from your accounting manual?

    Can you possibly describe the voucher that you expect to see?

    Many thanks,

    Ludwig

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