Sell or write off an asset (2024)

Sage Accounting

How to

Record the money received from the sale of an asset.
Record the profit or loss made from the sale of an asset.
Remove the value an asset from your balance sheet.
Write off an asset and record any loss.

At some time, you'll decide that you no longer need an asset, or you that you need to replace it. When this happens, there are two things you can do:

Sell your asset and record the money that you've received.
Write off your asset if it no longer has any use or value, i.e. you cannot sell it. If you’re not sure whether you should write off an asset, check with your accountant.

As you no longer have the asset, you'll need to remove its value from your balance sheet. The cost of any write off or any profit or loss you make from a sale is recorded on your profit and loss.

Sell an asset

If an asset still has some value and you decide to sell it, you must record this in your accounts as well.

To record the sales of your in your accounts, you

Remove the original value of the asset and it's accumulated deprecation from your balance sheet, and transfer the value to your profit and loss using a Journal.
Record the money you've received from selling the asset using a Other Receipt.

For example, you bought a car for £10,000. Over time it has depreciated in value by £8,000 and is now worth £2,000. However, you get a good deal, and manage to sell it on for £3,000, giving you a £1,000 profit.

Transfer the original purchase price

Transfer the accumulated depreciation

Record the sale of the asset

Write off an asset

To record the write off an asset in your accounts, you

Reduce the current value to zero on your balance sheet.
Add the write off amount to your depreciation costs on the profit and loss.

For example, if you bought a car worth £10,000 over time it has depreciated in value by £8,000, and is now worth just £2,000. No-one wants to buy your car, so you decide to write it off.

To do this, create a journal to remove the value from the relevant Accumulated Depreciation ledger Account on the balance sheet and add to the relevant Depreciation ledger account on your profit and loss.