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Motor vehicle conversion to a personal account

Feb 16, 2017 at 11:08 AM

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We recently bought motor vehicles for chief executive which we capitalized . A decision has now been made to convert the same into a personal loan. We did the disposal so we can take it off the asset register and then manually transferred the balance to the loan account. Now since the vehicles had depreciated for two months, there is a difference between the amount we transferred to the loan account and the amount in the disposal account. how do we resolve this?

Is this the correct way to do this transaction?

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1 Answer

Mukthar Ali Ahamed N Feb 16, 2017 at 11:33 AM
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Hi,

Before you do transfer posting to loan account, first you have to change the dep.key as 0000 for the asset, then after run AFAB in repeat mode for last period for the asset. This will reverse the posting depreciation for the asset. After that do transfer posting to loan account. Then the entire acquisition cost get trasnferred.

Regards,

Mukthar

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