| Disposing Assets |  |
| An asset disposal removes or reduces an asset from service in one or more of an asset's related books. It also prevents the asset from accumulating any more depreciation in those books. You can dispose of part of, or all of an asset's quantity or cost, or you can dispose of the asset in some but not all of its related books. For example, you may want to remove an asset from your financial books before you remove it from your federal tax books due to timing differences based on federal tax regulations. Note Due to complexities in tax law, you may want to retain the asset in some books but not in others. This requires you to make an asset disposal by book. For more information, refer to Disposing Asset Books. You can dispose of the full quantity of the asset or of a portion of it. You indicate the amount to dispose of on each distribution line. ERP LN makes sure that depreciation has been calculated up until the date on which the disposal takes effect, then it removes the indicated quantity from service in all of the asset's related books. Example If you dispose of an asset in March 2001 but periodic depreciation was last calculated in December 2002, ERP LN must generate depreciation for January and February before it disposes of the asset. If you dispose of an asset in June, but make the disposal effective for a previous month, ERP LN must reverse any depreciation that occurred in the months after the effective date. You can record proceeds for any type of disposal. For example, you can use the Proceeds Amount field in the Asset Disposal (tffam1204m000) session to record the fair market value of an asset that you disposed of through a charitable contribution. ERP LN records journal entries for all types of proceeds. As a result of a disposal, ERP LN changes the status of all disposed books from Depreciating to Disposed in the Asset Books (tffam1510m000) session. You can purge disposed assets from ERP LN by processing the History Purge (tffam8208m000) session. If an asset is only partially disposed of, you can still adjust, transfer, and depreciate it. ERP LN creates journal entries from disposals by using the values in the default-posting book. For more information, refer to Disposal Journals. In addition to recording disposals on an asset-by-asset or book basis, you can record mass disposals. For more information, refer to Disposing Mass Assets. Assets subject to ADR or MACRS group tax reporting have additional disposal options available. For more information, refer to Disposing Vintage/Group Accounts. |