Sage - Fixed Asset Sale

System · August 2004

Hi, How do I go about posting a sale of a fixed asset in Sage? The fixed asset in question is a property and the buyer is private, so no invoice is received. I understand I can post a bank receipt for the sale of the property, but then how do I reduce the balance of the fixed asset account? Thanks, Andy.

System · August 2004

Sage - Fixed Asset Sale

Have you tried posting a journal/journals instead? Dr Disposals (normally around 4200 in Sage) Cr Fixed Asset (normally 0XX0) with original cost price Dr Asset Depreciation (normally 0XX1) with accummulated depreciation to date for the asset Cr Disposals Dr Bank Cr Disposals with selling price The bank receipt window is essentially doing this last journal for you, but not the others. What you sell for is not going to be the same in most cases as what is on your fixed asset ledger account, therefore you need to follow through the other steps to dispose. If you run fixed assets register module, it has a Disposal wizard, which automatically does the postings for you. Best regards Ditti

System · August 2004

Sage - Fixed Asset Sale

 Hi Ditti, Thanks I didn't know about the Journal facility. Actually I think I should have posted the asset under Current Assets - the property in question was renovated and then sold (the company does property development) - not sure what the criteria is for designating something as a fixed asset, but in this case the asset isn't going to be depreciated so I presume it's a Current Asset? If it's treasted as a current asset would this be correct? - Cr Bank Current Account with amount from sale (using Bank Receipt) Dr Current Asset account under which property was purchased for original purchase amount (using Journal entry?) Thanks, Andy.

System · August 2004

Sage - Fixed Asset Sale

Andy, That puts a slightly different perspective on things. I would really need to know what nominal codes you posted in before the answer is clear. If it is and asset category, it is different than if you had put it under a "purchases / cost of sales" nominal code. Assets are normall 1XXX, purchases are normally 5XXX. This is how I would do it. If you have it under 1XXX, then journal out of there to an account that clears to the P&L, and raise sales invoice. If you are in 5XXX, this automatically clears to the P&L, so just raise sales invoice. I hope this helps. I am on holiday for a week, so I shall only pick up messages after Wed. Regards Ditti

System · August 2004

Sage - Fixed Asset Sale

Hi Andy In the case of a property which is to be renovated and subsequently sold, what you are dealing with is effectively Work In Progress and Stock. Despite the size of the transactions being larger than you would normally expect to find, the principles are the same. On purchase of the property you would post it ro purchases (normaly around 5000). Any costs incurred in carrying out the rennovations would also be posted to purchases (this being the effective Costs in connection with the subsequent sale). The stock/Work In Progress balance would need to be identified and would consist of the original purchase costs and the cost of any rennovation works to date. I would suggest this is posted as a journal: DR Stock/WIP (1100) CR Closing Stock/WIP (5200) As a result the cost of sales figure will not include any of the purchases in connection with the property until the month in which it was sold. When sold the asset would need to be removed from stock/WIP by reversing the above journal. The receipt should then be posted as Sales (4000). This way any profit on the rennovation work would be realised as you will be left with Sales less cost of sales. There are specific rules inconnection with long term contracts etc which may allow the release of profits over the period of rennovation. I can explain the basics of these if you need me to. Hope this helps Ben.

System · August 2004

Sage - Fixed Asset Sale

Hi, Diitta - thanks for your reply, I now understand that the property needs to be under a nominal code that appears on the P&L, which fixed and current assets do not. Ben - your reply explained exactly what I was looking to understand, thank you. I'm unclear as to the role of 'Closing Stock' however - would it just be a place to account for completed property waiting to be sold? Currently the company has a property on the market, however all the renovation costs are sitting under purchases. If I understand correctly, the cost of the renovation for this property should be identified and then - Dr Purchases with cost of renovation Cr Stock/WIP with cost of renovation (or Closing Stock if renovation complete) This is in order that the P&L doesn't included costs for a sale that has been realised yet. When the sale is made, just reverse the above, and a post a sale at the sale price as you suggest. Is my understanding correct? Lastly, yes I'd be interested any asset valuation information, in particular, how to account for the value of an asset currently for sale - would it simply be the market price of the property? Thanks, Andy.

Sage - Fixed Asset Sale

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