Asset gain/loss entry

[Former Member]

We have an issue that we have not found a solution for that involves  recording the gain/loss related to the sale of an asset to the Gain/Loss P&L account instead of A./D. We are familiar with booking retirements with or without revenue.  Currently, the gain/loss calculated with sale or retirement is automatically booked to accumulated depreciation, not gain/loss accounts.  We have sold some assets and the handling is unique in that we will have to book a gain.  We cannot post against accumulated depreciation.  We thought that we might need another transaction type that will book to a gain/loss account instead of accumulated depreciation, but that would require moving all of the assets to a new account determination.  And It doesn't seem possible either because the accounts are all balance sheet, and not profit/loss accounts. Any help is appreciated. 

With the current configuration the entry would be:

loss made on asset retirement w/o revenue             A/D General Plant

Clearing acct revenue from asset sale                      Asset Sale clearing

Gain from Asset sale                                                  A/D General Plant

Loss from asset sale                                                   A/D General Plant
Clearing revenue sale to affil company                    Asset sale clearing

We would like for the A/D General plant entries to go to our Gain/Loss account instead.  We have to record a gain, and cannot post it against accumulated depreciation.

[Former Member · Accepted solution]

This issue is resolved.  We defined new asset classes  and new account determinations for them.  We assigned the new account determinations to the asset classes.   The account determination for retirement account assignment fields were each populated with the P&L account desired.  The acquisition account assignment acquisition:acquis and production costs account and contra account: acquisition value fields did not require a change.  All other fields were not populated.  The depreciation Ordinary depreciation account assignment fields, and Unplanned depreciation account assignment fields did not require account number change.  We had to create new prior year and current transaction types for retirements unchecking post gain/loss to asset.  We also created Gain/Loss posting variants transation type selection:special treatment of retirement for each new transaciton type using retirement type 0 for depreciation area 1 (book).  This gave the desired result with one exception.  The revenue entry posted to the P&L account and had to be reclassed to the clearing account.  The entry looks like this:

Create new asset for new asset class using the same post capitalization date

Transfer costs from original asset to new asset.  Verify that accumulated depreciation transfers correctly.

Book retirement with revenue using new transaction type (with retirement type 0 for depreciation area 1).

Credit       General Plant                              (1000.00)

Debit         A/D General Plant                           15.00

Debit         Misc Non Op Income                  3000.00

Credit        Misc Non Op Income                   (985.00)

Manual reclass:

Debit         Misc Non Op Income                      985.00

Credit        Clearing account                            (985.00)

I hope this helps anyone else that encounters this request. 

[ajaycwa1981]

Hi Carol

Check if you done settings in IMG > AA > Transactions > Retirements > Gain/Loss postings

I think your system is configured not to post gain/loss on retirements

Browse the IMG nodes in the path above (especially Post Net Book Value Instead of Gain/Loss)

Br, Ajay M

[PankajPareek]

Hi Carol,

Asheesh correctly replied the behavior of the system but if I understood your question correctly then you want to know how to correctly register the gain/loss from asset sales to correct GL account instead of Accumulated depreciation.

Please go to t-code AO90. (this is also indicated by Asheesh) and provide the required chart of depreciation. For the Chart of Depreciation select required Account Determination. Select the required Account determination and double click on Balance Sheet. You will see list of GL accounts mapped for various activities. Check accounts for Gain/Loss from asset sale. Now go to depreciation and check value for accumulated depreciation for ordinary depreciation. It should NOT be same as that of Gain/Loss from asset sales (In fact make sure that GL account for gain/loss from asset sale should not match with any of the GL account mapped under depreciation). Below are screen shots to help you. Please let us know if your query is correctly answered else please do reply us so that we clearly understand your requirements.

[ab_ab]

Carol,

Your query is not very clear. I would take an example, and show the standard system behavior.

Ex1: Sale of an asset with revenue: APC = $12000, Acq on 1/1/2013, Sale of asset on 2/28/2013. Let's say depreciation (posted + planned) until date of retirement = $200. Therefore NBV as on 2//28/2013 = $9800. Let's say you sell the asset for $15000. Posting would be:

APC a/c                                     12000 CR

Accl Dep                                    200    DR

Clearing a/c Revenue from sale    15000 DR  --> from AO90

Gain/loss                                   3200 CR --> from AO90 field 'gain from asset sale'

Ex2:Ex1: Sale of an asset without revenue: APC = $12000, Acq on 1/1/2013, Sale of asset on 2/28/2013. Let's say depreciation (posted + planned) until date of retirement = $200. Therefore NBV as on 2//28/2013 = $9800. Asset sold at $0. Posting would be

APC a/c                12000 CR

Accl Dep                200    DR

Gain/loss              11800 DR --> from AO90 field 'loss made on asset retirement w/o rev'

I hope this clears your question??

Thanks

Asheesh Bhatia