Thursday, September 5, 2013

Accounting for Fixed Asset written off

When the Firm make a decision to write-off the fixed asset, the following entries might be passed:

Debit: Accumulated Depreciation
Debit: Loss on Asset written off (if any)
Credit: Fixed Asset at cost

The firm would write-off the fixed asset within the following instances:

Accounting for Fixed Asset

  1. The firm may possibly write-off the fixed asset, in the event the assets are no longer in feasible use.
  2. The fixed assets have already been completely depreciated.

In case 1 above, the firm could incurred a loss on fixed asset written down when the net book value is > nil. Whereas, when the assets have already been completely depreciated ( as in instance 2 no losses might be incurred upon written-off.

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