Disposal of Depreciable Assets
A Non Current Asset / Fixed Asset may be disposed off at any time time during its Useful Life. When Assets disposed off, The disposal of Fixed Assets results in Gains, Loss and No Gains No Loss for the business. If the Book Value is more than the Cash Received, there is Gains / Profit On Sale of Assets. But, If Books Value is lesser than the amount of Cash Received, then Loss is the result on the sale of Fixed Assets. Sometimes, the Book Value is Equal to the amount of Cash Received, then Entrepreneur neither gains nor losses but, in fact, the Entrepreneur is at the Break Even Point on the Sale of Fixed Assets. The Entrepreneur may also sale the Fixed Assets in the market or exchange with new Fixed Assets in the market. This is called Exchanging or Traded In of Assets or Sale of Old Assets And Buying New Assets of the Same Nature, i.e., Selling Old Machinery and Buying New Machinery, etc. 1. There are three Cases When Fixed Assets Are Sold In The Market...