Asset Disposal

Removing Assets from the Books

When a tangible or intangible asset is sold, abandoned, or retired, its carrying amount must be removed from the accounting records. Any difference between the proceeds received and the carrying amount is recognized as a gain or loss.

Gain (Loss) = Proceeds Received − Carrying Amount

• Update amortization or depreciation before disposal.
• Remove accumulated amortization or depreciation.
• Remove the asset's carrying amount.
• Recognize gain or loss.