Asset Remove, Sale and Scrap

The asset removal process is used when a fixed asset is sold, scrapped, written off, or otherwise removed from company records.

Axanta ERP removes the asset cost and accumulated depreciation from the accounts and records the remaining book value, sale proceeds, gain, or loss according to the selected Removal Entry Policy.

Important: Review and post all depreciation entries due before the removal date. The system does not allow removal before the last posted depreciation date.

1. Prepare the Asset Profile

Before removing an asset, review the disposal accounts configured in its Asset Profile.

Go to Accounting → Configuration → Asset Profiles and open the required profile.

Profile Field	Purpose	Required Account Type
Residual Value Account	Records the remaining book value when the Residual Value policy is selected.	Account selected according to company policy
Gain on Disposal Account	Records the gain when the sale amount is greater than the asset’s book value.	Income or Other Income
Loss on Disposal Account	Records the loss when the sale amount is lower than the asset’s book value.	Expense, Depreciation Expense, or Direct Cost

The Gain on Disposal, Loss on Disposal, and Residual Value accounts entered in the Asset Profile are automatically proposed in the removal window. They can be changed before generating the removal entry.

Image placeholder: Insert an image of the Asset Profile Disposal Asset Accounting section.

2. Open the Removal Window

Step 1: Go to Accounting → Assets → Assets.

Step 2: Open the asset that must be sold, scrapped, or removed.

Step 3: Review the asset’s value and depreciation board.

Step 4: Click Remove.

The Remove button is available for assets in Running or Close status.

Image placeholder: Insert an image of an asset showing the Remove button.

3. Complete the Removal Details

Field	What to Enter	Example
Asset Removal Date	Enter the date on which the asset is sold, scrapped, or removed.	30 June 2026
Accounting Date	Enter the date to use on the removal journal entry. Leave it blank to use the Asset Removal Date.	30 June 2026
Removal Entry Policy	Select how the remaining asset value should be recorded.	Gain/Loss on Sale
Book Value	The asset’s remaining book value at the removal date. This value is calculated automatically.	$100
Sale Amount	Enter the amount received from the sale. Enter zero when the asset is scrapped without proceeds.	$200
Gain / (Loss)	Calculated automatically as Sale Amount minus Book Value. A positive value is a gain and a negative value is a loss.	$100 gain
Sale Settlement Account	The account debited with the sale amount. It is normally an asset disposal control account, but a Bank or Cash account may also be selected.	Asset Disposal Control
Gain on Disposal Account	The income account credited when the sale amount exceeds the book value.	Gain on Asset Disposal
Loss on Disposal Account	The expense account debited when the sale amount is lower than the book value.	Loss on Asset Disposal
Residual Value Account	The account debited with the book value when the Residual Value policy is selected.	Asset Disposal Expense
Notes	Enter any explanation or supporting reference for the removal. The note is added to the journal entry.	Asset sold under approval AD-2026-014

The Sale Amount cannot be negative. Enter zero when the asset is scrapped or removed without receiving any proceeds.

Image placeholder: Insert an image of the Generate Asset Removal Entries window.

4. Select the Removal Entry Policy

Policy	When to Use It	Accounting Result
Residual Value	Use when the remaining book value should be transferred to a Residual Value Account.	Removes the asset cost and accumulated depreciation and debits the remaining book value to the Residual Value Account.
Gain/Loss on Sale	Use for an asset sale, a scrap without proceeds, or when a gain or loss must be recognized.	Records the sale proceeds and posts the difference between the proceeds and book value as a gain or loss.

The default policy may depend on the company’s country. Review the selected policy before generating the removal entry.

5. Gain/Loss on Sale

Under the Gain/Loss on Sale policy, Axanta ERP compares the Sale Amount with the asset’s Book Value.

Result	Calculation	Account Required
Gain	Sale Amount is greater than Book Value.	Gain on Disposal Account
Loss	Sale Amount is lower than Book Value.	Loss on Disposal Account
Break-even	Sale Amount equals Book Value.	No gain or loss account is used
Scrap	Sale Amount is zero and Book Value remains.	Loss on Disposal Account

5.1 Sale with a Gain

Information	Amount	Result
Original Asset Cost	$1,000	Removed from the Fixed Asset Account
Accumulated Depreciation	$900	Reversed from Accumulated Depreciation
Book Value	$100	$1,000 minus $900
Sale Amount	$200	Debited to the Sale Settlement Account
Gain on Disposal	$100	$200 minus $100

Account	Debit	Credit
Accumulated Depreciation	$900	-
Sale Settlement Account	$200	-
Fixed Asset Account	-	$1,000
Gain on Disposal	-	$100

5.2 Sale with a Loss

Information	Amount	Result
Original Asset Cost	$1,000	Removed from the Fixed Asset Account
Accumulated Depreciation	$900	Reversed from Accumulated Depreciation
Book Value	$100	$1,000 minus $900
Sale Amount	$50	Debited to the Sale Settlement Account
Loss on Disposal	$50	$100 minus $50

Account	Debit	Credit
Accumulated Depreciation	$900	-
Sale Settlement Account	$50	-
Loss on Disposal	$50	-
Fixed Asset Account	-	$1,000

5.3 Break-even Sale

When an asset with a book value of $100 is sold for $100, no gain or loss line is created.

Account	Debit	Credit
Accumulated Depreciation	$900	-
Sale Settlement Account	$100	-
Fixed Asset Account	-	$1,000

6. Scrap an Asset

To scrap an asset without receiving any proceeds, select Gain/Loss on Sale and enter a Sale Amount of $0.

Information	Example	Accounting Result
Original Asset Cost	$1,000	Credited from the Fixed Asset Account
Accumulated Depreciation	$900	Debited from Accumulated Depreciation
Book Value	$100	Recorded as a loss
Sale Amount	$0	No Sale Settlement Account line is created

Account	Debit	Credit
Accumulated Depreciation	$900	-
Loss on Disposal	$100	-
Fixed Asset Account	-	$1,000

A Sale Settlement Account is not required when the Sale Amount is zero. A Loss on Disposal Account is required when the asset still has a book value.

7. Residual Value Policy

The Residual Value policy transfers the remaining book value to the selected Residual Value Account. It does not record sale proceeds or calculate a gain or loss.

Information	Amount	Accounting Result
Original Asset Cost	$1,000	Credited from the Fixed Asset Account
Accumulated Depreciation	$900	Debited from Accumulated Depreciation
Remaining Book Value	$100	Debited to the Residual Value Account

Account	Debit	Credit
Accumulated Depreciation	$900	-
Residual Value Account	$100	-
Fixed Asset Account	-	$1,000

Do not use the Residual Value policy when sale proceeds and a gain or loss must be recorded. Use Gain/Loss on Sale instead.

8. Sale Settlement Account

The Sale Settlement Account records the amount expected or received from the asset sale.

Account Choice	When to Use It	Example
Asset Disposal Control Account	Use when the sale will be settled separately through a receipt, bank transaction, or other accounting process.	Asset Disposal Control
Bank Account	Use when the sale proceeds are received directly into the bank and company policy permits direct posting.	Main Bank Account
Cash Account	Use when the proceeds are received directly in cash.	Cash on Hand

The Sale Settlement Account must be a Current Asset or Bank and Cash account. A Receivable account cannot be selected.

When an Asset Disposal Control Account is used, clear that account through the separate receipt, bank, or settlement transaction. The balance of the control account should be reviewed regularly.

9. Early Removal

Early removal occurs when an asset is removed before its depreciation schedule has been completed.

Rule	System Behaviour	User Action
Previous depreciation periods	All depreciation periods before the removal period must already be posted.	Post all earlier due depreciation entries.
Partial depreciation	Depreciation is calculated up to the day before the Asset Removal Date.	Review the partial depreciation amount.
Future depreciation lines	Remaining future depreciation lines are removed from the board.	Confirm that the revised board is correct.
Book value	The removal book value is calculated after considering the partial depreciation.	Review the Book Value preview.

Critical posting note: During early removal, the partial depreciation entry up to the day before removal is created and posted immediately. Review the removal date carefully before generating the removal entries.

Early removal cannot proceed if depreciation entries for previous periods have not been posted.

10. Generate the Removal Entry

Step 1: Review the Asset Removal Date and Accounting Date.

Step 2: Select the correct Removal Entry Policy.

Step 3: Review the Book Value and Gain / (Loss) previews.

Step 4: Verify the settlement, gain, loss, or residual value account shown by the system.

Step 5: Click Generate Removal entries.

The removal journal entry is generated in Draft status. Review the accounts and amounts before posting it.

The asset status changes to Removed immediately after the removal entry is generated, even while the removal journal entry is still in Draft status.

Image placeholder: Insert an image of the draft asset removal journal entry.

11. Review the Journal Entry

Review	Expected Result	Example
Fixed Asset Account	The full original asset cost is removed from the account.	Credit $1,000
Accumulated Depreciation	The accumulated depreciation related to the asset is reversed.	Debit $900
Sale Settlement Account	The sale amount is recorded when proceeds are entered.	Debit $200
Gain or Loss	The difference between the Sale Amount and Book Value is recorded.	Credit gain of $100
Journal Balance	Total debits must equal total credits.	Debit $1,100 and Credit $1,100
Accounting Date	The entry uses the Accounting Date, or the Asset Removal Date when Accounting Date is blank.	30 June 2026
Analytic Distribution	The asset’s analytic distribution is copied to applicable settlement, residual, gain, or loss lines.	Finance Department 100%

Critical review: Do not post the removal journal entry until the Fixed Asset Account, Accumulated Depreciation, settlement amount, and gain or loss have been verified.

12. Result on the Asset

Item	System Result	Where to Review
Asset Status	The status changes to Removed.	Asset form and asset list
Asset Removal Date	The selected removal date is saved on the asset.	Asset form
Depreciation Board	An Asset Removal line is added.	Depreciation Board tab
Journal Entry	The removal entry is linked to the Asset Removal line.	Journal Entries
Future Depreciation	Future depreciation entries are no longer processed for the removed asset.	Depreciation Board

13. Correct a Removal

An accounting entry linked to an asset should not be deleted directly from the Journal Entries menu.

Use the removal line or the asset’s available reversal process when a removal entry must be corrected. Direct deletion of an accounting entry linked to an asset is restricted.

Depending on the Asset Profile configuration, the system may allow the linked entry to be reversed instead of deleted. Removing or reversing the removal entry restores the asset from Removed status for further correction.

Review the effect on the asset status, removal date, depreciation board, and accounting entry after any reversal or correction.

14. Reporting

Removal information is available in the Financial Assets Report and related asset reporting.

Reported Information	Purpose	Example
Asset Removal Date	Identifies when the asset was removed.	30 June 2026
Accounting Date	Shows the date used on the removal journal entry.	30 June 2026
Removal Entry Policy	Shows how the disposal was accounted for.	Gain/Loss on Sale
Book Value at Removal	Shows the remaining book value on the removal date.	$100
Sale Amount	Shows the proceeds recorded for the asset sale.	$200
Gain / Loss	Shows the result of the asset disposal.	$100 gain
Sale Settlement Account	Identifies where the sale amount was recorded.	Asset Disposal Control

When an Asset Disposal Control Account is used, reconcile the reported sale amount with the separate receipt or settlement transaction.

15. Final Review Checklist

Check	Required Review	Completed
Depreciation Entries	All depreciation due before the removal date has been posted.	Yes / No
Removal Date	The correct asset removal date has been entered.	Yes / No
Accounting Date	The journal entry date is correct.	Yes / No
Removal Policy	Residual Value or Gain/Loss on Sale is selected correctly.	Yes / No
Book Value	The calculated book value has been reviewed.	Yes / No
Sale Amount	The sale amount agrees with supporting documents.	Yes / No
Settlement Account	The correct control, bank, or cash account has been selected.	Yes / No
Gain or Loss Account	The correct income or expense account has been selected.	Yes / No
Journal Entry	The full asset cost is removed and the entry is balanced.	Yes / No
Asset Status	The asset is shown as Removed.	Yes / No

Final critical note: Generating the removal entry changes the asset to Removed status, but the removal journal entry remains in Draft until it is reviewed and posted. For an early removal, any required partial depreciation entry is posted immediately.