This article explains how to scrap a fixed asset in Qoyod (treat it as unfit for use), the required data, and the Journal Entry resulting from scrapping.
What is asset scrapping
Scrapping a fixed asset means treating the asset as unfit for use due to:
- End of its productive life.
- Inefficiency.
- Unforeseen events (fire, accidents, damage).
The operation is carried out by closing the asset’s accumulated depreciation against its cost, and recording the difference as asset losses.
Path in Qoyod
Fixed Assets › Disposals › Dispose of an Asset › Scrap
Steps
- Open the “Fixed Assets” section and choose “Disposals”.
- Click “Dispose of an Asset”.
- Choose “Scrap”.
- Fill in the data (see the next section).
- Click “Save”.
Scrapping data
- Scrapping reference: auto-filled as SC1 and can be edited to be unique.
- Asset category (required): to filter the asset to be scrapped.
- Asset name (required): the asset to be scrapped.
- Registered asset reference (required).
- Scrapping date: auto-filled with today’s date and can be edited.
- Loss account: must be among “Other Income”. Appears as debit.
- Description (optional).
Data of the asset to be scrapped
After filling in, the asset data appears automatically:
- Serial number.
- Accumulated depreciation to date.
- Receipt date.
- Unrecorded depreciation up to the disposal date: if the recorded amount is less than the estimated, the difference appears here.
- Book value: asset cost minus accumulated depreciation.
