Dispose Object

This process is used to dispose an object and to create accounting transactions for the disposal.  

To dispose an object, it is required that at least one voucher type that is not connected to a book and of which the ledger type GL, Affect IL exists for the company. At the same time, at least one transaction reason which can be used as a disposal reason must exist. If the object to be disposed is not a rotable pool object, its status must be Active at the time you carry out the disposal. On the other hand, if the object is a rotable pool object, its status must be Allow Scrap.

You can dispose an object by selling, scrapping or transferring the asset.

A sale of an object takes place when the disposal of the object generates an income for the company. When this operation is carried out, an amount greater than zero must be entered as the sales value. In addition to the accounting transactions created, you can write off the acquisition value, acquisition value adjustments per book and the depreciation. This operation also results in posting accounting transactions to the sales income. Selling an object results in a change in the object status from Active to Sold.

The posting control for postings types FAP7 and FAP8 must be defined to counter-post the acquisition value and accumulated depreciation. The sales income is posted using FAP9 - Sale, Income and counter-posted using FAP10 - Sale, Interim Posting.  If profit/loss postings from the sales are required for one or several books posting types FAP35, FAP36, FAP37 and FAP38 must be defined. For objects with acquisition value adjustments per book posting types FAP43, FAP44, FAP45 and FAP46 must be defined.
 

A scrap of an object takes place when the disposal of the object does not generate any income for the company. Accounting transactions are created in the system to write off the acquisition amount, the acquisition value adjustments per book and the depreciation. This operation can also be carried out in the Fixed Assets Physical Counting flow. Scrapping an object results in a change in the object status from Allow Scrap or Active to Scrapped.

The posting control for postings types FAP11 and FAP12 must be defined to counter-post the acquisition value and accumulated depreciation. For objects with acquisition value adjustments per book posting types FAP45 and FAP46 must be defined. For scrapping rotable pool objects the posting types FAP19, FAP20 and FAP27 must be defined.

A transfer of an object takes place when an object is transferred from one company to another. It is a disposal of an asset for a sending company and an acquisition of an asset for the receiving company. The transfer of an object may or may not generate income for the sending company. If an income exists, the operation also results in posting accounting transactions to the sales income. The accounting transactions are created in the system to write off the acquisition amount, the acquisition value adjustments per book and the depreciation in relation to the disposal. Transfer an object results in a change of the object status from Active to Transferred.

There are a number of posting types involved for the disposal part of an asset transfer. The posting control for posting type FAP51 and FAP52 should be defined to counter-post the the acquisition value and and accumulated depreciation. The transfer income is posted using FAP53 - Transfer, Income and counter-posted using FAP54 - Transfer, Income, Interim Posting. Optionally, the inter company transaction can be created to counter-post the transfer income using FAP55 - Inter Company Due From Affiliated Company. If profit/loss postings from the transfer are required for one or several books posting types FAP58, FAP59, FAP60 and FAP61must be defined. For objects with acquisition value adjustments per book posting types FAP62, FAP63 must be defined.

 

When selling, transferring or scrapping an object a check can be performed to find out whether depreciations have been posted until the period defined in the disposal principle of the depreciation method. If all depreciations have not been posted yet, then the process can either be interrupted to create missing depreciations or continue without creating missing depreciations.

The posting types used to handle the accounting transactions for disposal of fixed assets differ according to the nature of the disposal (i.e. whether the disposal is sale, transfer or scrap) as well as the disposal posting method connected to the object being disposed via books.

The voucher type used to create accounting transactions for a disposal of an object can be the voucher type specified for the book connected to the object being disposed or the voucher type you select at the time the disposal is carried out.

The following scenarios illustrate how the accounting process for a disposal of an object varies according to the book connected to the object.

Once the accounting transactions are created, you can roll back the disposal if necessary. This would result in a change in the object status from Sold or Scrapped to Allow Scrap or Active. If a transfer transaction is rolled back, the status of the object in the sending company will change from Transferred to Active.

The information stored in the Disposal tab in the Object window will be cleared when a disposal is rolled back.