Disposal of an asset

Step 1 – Set up an account in Xero for profit/ loss on disposal

If an account is not already set up in Xero, this can be done by following the steps below:

Accounting -> Chart of Accounts -> Add Account

Click Save

Step 2 – Disposal of an asset

Accounting -> Advanced -> Fixed assets

Click on the Registered tab

Click on the asset number to open the asset details

Click on the Options dropdown menu -> Dispose

Enter the details of the disposal:
a. Date disposed
b. Sales Proceeds (Type 0 if no proceeds/ the asset is donated)
c. Sales Proceeds Account (Choose Profit/ Loss on disposal of asset)
d. Depreciation (depends on the policy, you could choose ‘All depreciation up to and including’)
e. Date (If choosing ‘All depreciation up to date and including’ in the step above, enter the date of disposal)

Click on Show Summary

Review the disposal summary. If you need to make any changes, click Update to see the revised disposal summary.

Click on Review Journals

Select the account ‘Profit/ loss on disposal of asset’

Click Post

The asset will now be shown under ‘Sold and Disposed’