Liquidation asset


Fixed assets are classified as tangible assets. Their lifespan is more than one year, have a material form, are usable and they are used for business purposes. They are used in virtually any enterprise, regardless of the profile of its activities.

After some time, they wear or damage and is not suitable for further use. In addition to natural wear and tear of the asset, it can also be eliminated by random events such as. A fire, as a result of economic decisions, or by changing the business profile and then must make their liquidation.

In practice, there are two stages of liquidation. Stage 1 is the liquidation of the accountant. It means derecognition of the liquidated asset account called "Assets" as well as an account called "Accumulated depreciation of fixed assets". The document, which will place the asset liquidation is LT - liquidation of the asset. Usually, this document draws up the liquidation committee or a department that manages the assets. Approved by the head of the unit. LT document is the basis to remove an item from the register and contrast it with the value of accounts. This value is then transferred to off-balance sheet. There asset remains until his physical liquidation.

Stage 2 is the physical liquidation. It is the final stage of the liquidation of the asset. It involves the disposal or zezłomowaniu things and preparing the minutes from this action. The protocol must contain a stamp unit, place and date of preparation, number, data of people who are part of the liquidation commission, marking the liquidated asset and the method of liquidation and signatures of the members of the committee. On the basis of the Protocol shall be removed from the asset balance sheet records which means removing it from the books.

The liquidation of the asset may entail some costs. They must be incurred to bring the liquidation process to the end. The resulting costs are booked in against the rest of the operating costs. During the liquidation it is also possible to obtain so-called recoveries. These materials, which are, for example, the scrapped. If they are subject to storage, you can post to the account of the store. If, however, eliminates one asset to build another, the resulting costs and revenues that will be associated with the liquidation will be corrected the value of fixed assets under construction. With the liquidation of the asset created the result, which shows a total in the profit and loss account. Profit is recognized under the heading "Profit on disposal of fixed assets".

If the company reaches a loss, it shall be disclosed under the heading "Loss on disposal of fixed assets". When disposing of the asset should be aware of the income tax. The Income Tax Act does not prohibit the recognition of losses that arise in the course of liquidation of assets, which are not fully depreciated for tax deductible. But there is one exception. It is a situation when fixed assets that are liquidated lost their economic usefulness as a result of changes in the type of business.