Liquidation of fixed assets in the accounting basis

Overview of Fixed Assets Liquidation The liquidation of fixed assets refers to the scrapping and liquidation of fixed assets, as well as the liquidation of fixed assets that have been damaged and lost due to various force majeure natural disasters. "Disposal of fixed assets" is an asset account, which is used to account for the net value of fixed assets transferred to liquidation by the enterprise due to **, scrapping and damage, as well as the liquidation expenses and liquidation income incurred in the liquidation process. The debit side registers the net value of fixed assets transferred to liquidation, the expenses incurred in the process of liquidation, and the amount of net income transferred to the "non-operating income" account after the liquidation is completed; The credit balance of the credit registers the amount of the price, residual material value and valuation income of the fixed assets recovered and the amount transferred to the "non-operating expenses" account after the liquidation of the net loss, and the credit balance represents the net income after the liquidation; The debit balance represents the net loss after the liquidation, after which the credit or debit balance should be transferred to the "non-operating income" or "non-operating expenses" account.

Accounting Procedure 1)**, when the scrapped and damaged fixed assets are transferred to the liquidation, borrow: the fixed assets are disposed of ** into the book value of the fixed assets for liquidation).

Accumulated depreciation (depreciation accrued).

Provision for impairment of fixed assets (provision for impairment that has been made).

Credit: Fixed asset (book value of fixed asset).

2) When the disposal cost is incurred, borrow: fixed assets liquidation.

Credit: Bank deposits.

3) When calculating and paying business tax, enterprises selling real estate such as houses and buildings shall, in accordance with the relevant provisions of the tax law, calculate and pay business tax according to their sales amounts, and borrow: liquidation of fixed assets.

Credit: Tax Payable - Business Tax Payable.

4) When recovering the price, residual material value and valuation income of ** fixed assets, borrow: bank deposits.

raw materials, etc. Credit: Disposal of fixed assets.

5) When compensation should be made by the insurance company or the negligent person, borrow: other receivables.

Credit: Disposal of fixed assets.

6) Net income after the disposal of fixed assets, borrowed: fixed assets liquidation.

Credit: Long-term amortized expenses (during the preparation period).

Non-operating income – net income from fixed assets (belonging to the period of production and operation).

7) Net loss after the liquidation of fixed assets, borrowed: long-term amortized expenses (belonging to the preparation period).

Non-operating expenses - extraordinary losses (losses caused by natural disasters and other abnormal reasons during production and operation).

Non-operating expenses - net loss on fixed assets (normal loss on disposal during production and operation).

Credit: Disposal of fixed assets.

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The carrying amount of the attributable assets minus the accrued depreciation and impairment provisions is equivalent to the liquidation of the contingent assets to be disposed of, and finally the non-operating income and expenditure are used to reflect the profit or loss of disposal.

What is the problem with the disposal of fixed assets?

1. Accounting treatment of fixed assets transferred to liquidation:

Borrow: Disposal of fixed assets.

Accumulated Depreciation Credit: Fixed Assets.

2. Accounting processing for payment of clean-up costs:

Borrow: Disposal of fixed assets.

Credit: Bank deposits.

3. Accounting treatment of sales and VAT accrual (if it meets the simplified tax calculation):

Borrow: Bank deposit.

Credit: Disposal of fixed assets.

Tax Payable - Simple Tax Calculation.

4. Accounting treatment of VAT addition:

Borrow: Disposal of fixed assets.

Credit: Tax Payable - Additional Tax.

5. Enterprises shall levy value-added tax at a reduced rate of 2%, and the accounting treatment of the part of the reduction and exemption of 1%.

Debit: Tax Payable - Simple Tax Calculation.

Credit: Non-operating income - tax deduction.

6. Accounting treatment of stamp duty on disposal of fixed assets by enterprises:

Borrow: Disposal of fixed assets.

Credit: Tax Payable - Stamp Duty.

7. Accounting treatment of the transfer of fixed assets liquidation results to profit and loss

Borrow: Disposal of fixed assets.

Credit: Gain on disposal of assets.

Or the other way around.

Disposal of fixed assetsAccounting Processing:

1. Transfer the fixed assets (book value) to the fixed assets for disposal.

Borrow: Disposal of fixed assets.

Accumulated depreciation. Provision for impairment of fixed assets, if any

Credit: Fixed Assets.

2. Cleaning expenses incurred, etc.

Borrow: Disposal of fixed assets.

Taxes and fees due. – VAT payable (input tax.

Credit: Bank deposits.

3. Recover the price, residual material value and valuation income of fixed assets.

1) Recover the price and tax of ** fixed assets.

Borrow: Bank deposit.

Credit: Disposal of fixed assets.

Tax Payable – VAT payable (output tax.

2) Residual material storage.

Borrow: raw materials.

Credit: Disposal of fixed assets.

4. Handling of insurance or negligence compensation.

Debit: Other receivables.

Credit: Disposal of fixed assets.

5. Clean-up net profit and loss.

Due to the loss of use of fixed assets or natural disasters.

The gains or losses arising from scrapping and liquidation due to damage and other reasons shall be included in the non-operating income and expenditure.

Net loss. Borrow: Non-operating expenses.

Disposal of non-current assets.

Losses (normal causes).

Non-operating expenses – extraordinary loss (not due to normal causes).

Credit: Disposal of fixed assets.

Net income. Borrow: Disposal of fixed assets.

Credit: Non-operating income.

Gain on disposal of non-current assets.

Gains or losses on the disposal of fixed assets arising from **, transfer, etc. shall be included in the gains on asset disposal.

Net loss. Borrow: Gains and losses on disposal of assets.

Credit: Disposal of fixed assets.

Net income. Borrow: Disposal of fixed assets.

Credit: Gains and losses on disposal of assets.

The contents of the fixed asset disposal.

The liquidation of fixed assets refers to the general term for the identification, scrapping, write-off of assets, and disposal of residual value of fixed assets that have lost their production capacity due to wear and tear, disasters and accidents, or that need to be eliminated and updated due to obsolescence and obsolescence. Therefore, the liquidation of fixed assets is the last procedure or work for the withdrawal of fixed assets from the stage.

1. Transfer the fixed assets to be disposed of into the liquidation entries.

Borrow: Disposal of fixed assets.

Accumulated depreciation. Credit: Fixed Assets.

2. When the clean-up costs are incurred:

Borrow: Liquidation of fixed assets.

Credit: bank deposits, taxes payable, etc.

3. Income from disposal.

Credit: Disposal of fixed assets.

Fourth, clean up the net profit and loss.

1. If it is a net income.

Borrow: Disposal of fixed assets.

Credit: Non-operating income.

2. If it is a net loss.

Borrow: Non-operating expenses.

Credit: Disposal of fixed assets.

How to do accounting treatment for the scrapping of fixed assets?

If the fixed assets of the taxpayer for which the input tax has been deducted are subject to the circumstances listed in items (1) to (3) of Article 10 of the Regulations, the non-deductible input tax shall be calculated according to the following formula in the current month: non-deductible input tax = net fixed asset value Applicable tax rate The net fixed asset value mentioned in this notice refers to the net fixed asset value calculated by the taxpayer after depreciation in accordance with the financial accounting system.

1.Article 10 of the Regulations reads as follows:

The input VAT of the following items shall not be deducted from the output VAT:

1) Purchased goods or taxable services used for non-VAT-taxable items, VAT-exempt items, collective welfare or personal consumption;

2) Purchased goods and related taxable services with abnormal losses;

3) Purchased goods or taxable services consumed in products or finished products with abnormal losses;

4) Consumer goods for taxpayers' own use as stipulated by the competent financial and taxation authorities;

5) The transportation costs of the goods specified in subparagraphs (1) to (4) of this Article and the transportation costs for the sale of duty-free goods.

2.The term "abnormal loss" mentioned in Article 24, Item (2) of Article 10 of the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Value-Added Tax refers to the loss caused by theft, loss, mildew and deterioration due to poor management.

3.The accounting treatment is as follows:

Borrow: Disposal of fixed assets.

Accumulated depreciation. Credit: Fixed Assets.

Borrow: Disposal of fixed assets.

Credit: Bank deposits (incurred liquidation costs).

Tax Payable – VAT Payable (Input Tax Transferred Out).

Borrow: Business orange clever extrajudicial expenditure.

Credit: Disposal of fixed assets.

Earnings incurred are transferred to non-operating income.

As mentioned above, in the liquidation of fixed assets, the way of writing entries is also determined according to the way it is liquidated, and there are many more entries to be made in the liquidation of fixed assets than the financial imagination. In addition, if the financial department does not clean up the fixed asset, but extends its useful life, the entries are different when making accounts.

The disposal of fixed assets belongs to the asset class account, which is used to account for the net value of fixed assets transferred to liquidation due to **, scrapping and damage, as well as the liquidation expenses and liquidation income incurred in the liquidation process.

1. What is the liquidation of fixed assets?

The liquidation of fixed assets refers to the scrapping and loss of fixed assets, as well as the liquidation of fixed assets that have been damaged and lost due to various force majeure natural disasters.

2. Accounting treatment of fixed assets liquidation:

Fixed Assets Disposal" account, the debit side registers the net value of fixed assets transferred to liquidation and the expenses incurred in the process of liquidation; The credit registers the price obtained, the residual value and the sale income of the fixed asset. The debit balance represents the net loss after liquidation; The credit balance represents the net gain after the liquidation. After the liquidation is completed, the net income will be transferred to Mingwu's "non-operating income" or "asset disposal profit and loss" account according to whether the assets still have value; The net loss is transferred to either the "Non-Operating Expenses" account or the "Gains and Losses on Asset Disposal" account.

After the liquidation of fixed assets is completed, it belongs to the normal processing loss during the production and operation period, and the account of "non-operating expenses - loss on disposal of non-current assets" is debited and credited; Losses caused by natural disasters and other abnormal causes are debited to the account "Non-operating expenses - extraordinary losses" and credited to this account.

When an enterprise disposes of unwanted fixed assets, it can be accounted for according to the 'Fixed Assets Disposal' account. So how to deal with the accounting of fixed assets?

Accounting entries for fixed asset disposal.

1) **, scrapped and damaged fixed assets transferred to the liquidation.

Debit: Accumulated depreciation of the book value of fixed assets (depreciation that has been accrued).

Provision for impairment of fixed assets (provision for impairment that has been made).

Credit: Fixed assets (original book value of fixed assets).

2) In the event of a clean-up fee.

Borrow: Disposal of fixed assets.

Credit: Bank deposits.

3) When recovering the price, residual material value and valuation income of ** fixed assets.

Borrow: Bank deposit.

raw materials, etc. Credit: Disposal of fixed assets.

4) When compensation should be made by the insurance company or the negligent party.

Debit: Other receivables.

Credit: Disposal of fixed assets.

5) Net income after disposal of fixed assets.

Borrow: Disposal of fixed assets.

Credit: Long-term amortized expenses (during the preparation period).

Gains and losses on disposal of assets (belonging to the period of production and operation).

6) Net loss after disposal of fixed assets.

Borrow: Long-term amortized expenses (belonging to the preparation period).

Non-operating expenses: Extraordinary losses (losses caused by natural disasters and other abnormal reasons), non-operating expenses, losses on disposal of non-current assets (normal scrapping and disposal), gains and losses on asset disposal (belonging to the production and operation period).

Credit: Disposal of fixed assets.

What is Fixed Asset Liquidation?

It is a general term for the identification, scrapping, write-off of assets, and disposal of residual value of fixed assets that need to be eliminated and updated due to wear and tear, extraordinary disasters and accidents, or due to obsolescence.

The debit side registers the net value of the assets transferred to the liquidation and the expenses incurred in the liquidation process; The credit registers the price of the fixed assets, the value of the residual materials and the income from the sale of the fixed assets. Its debit balance represents the net loss after liquidation; The credit balance represents the net gain after the liquidation.

Fixed asset disposal is an asset class, but it is a transition account.

The basic concept of fixed assets liquidation: the liquidation of fixed assets refers to the scrapping and liquidation of fixed assets, as well as the liquidation of fixed assets that have been damaged and lost due to various force majeure natural disasters.

"Disposal of fixed assets" is an asset class account, which is used to account for the net value of fixed assets transferred to the liquidation due to **, scrapping and damage, as well as the liquidation expenses and liquidation income incurred in the liquidation process. The debit side registers the net value of fixed assets transferred to liquidation and the expenses incurred in the process of liquidation and arrest. The credit registers the price obtained, the residual value and the sale income of the fixed asset.

Its credit balance represents the net gain after liquidation. The debit balance represents the net loss after liquidation; After the liquidation, the net income is transferred to the "non-operating income" account.

The net loss is transferred to the "non-operating expenses" account.

Fixed asset disposal is an asset class account.

The liquidation of fixed assets is a general term for the identification, scrapping, write-off of assets, and disposal of residual value of fixed assets that must be eliminated and updated due to wear and tear, extraordinary disasters and accidents, or due to obsolescence and obsolescence. "Disposal of fixed assets" is an asset accounting account, which is used to account for the net value of fixed assets transferred to liquidation due to **, scrapping and damage, as well as the liquidation expenses and liquidation income incurred in the liquidation process.

The debit side registers the net value of fixed assets transferred to liquidation and the expenses incurred in the process of liquidation; The credit registers the price, residual material value and valuation income of the fixed assets recovered, and the credit balance represents the net income after liquidation; The debit balance represents the net loss after the liquidation, after which the credit or debit balance should be transferred to the "non-operating income" or "non-operating expenses" account.

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Fixed loss of fixed asset profit:

The fixed assets that are profitable in the property inventory of the enterprise shall be treated as errors in the previous period. The fixed assets of an enterprise that are profitable in the property inventory shall be accounted for through the account of "profit and loss adjustment of previous years" before being submitted for approval according to the management authority. Fixed assets with surplus should be recorded at replacement cost.

The enterprise shall debit the "Fixed Assets" account and credit the "Prior Year Profit and Loss Adjustment" account for the recorded value determined in accordance with the above provisions.

Fixed asset inventory loss:

For the fixed assets that are lost in the property inventory, the "property loss and excess to be disposed of" account shall be debited according to the book value of the loss-making fixed assets, the "accumulated depreciation" account shall be debited according to the accumulated depreciation accrued, the "fixed assets impairment provision" account shall be debited according to the impairment provision provided, and the "fixed assets" account shall be credited according to the original price of the fixed assets.

When the report is processed after approval according to the management authority, the "other receivables" account shall be debited according to the recoverable insurance compensation or the compensation of the negligent person, and the "non-operating expenses - inventory loss and loss" account shall be debited according to the amount that should be included in the non-operating expenses, and the "property loss and excess to be disposed of" account shall be credited.