Dispose of or sell an asset

If you have the Adviser user role, record the disposal of a registered asset (including pooled assets) you sold, gave away, or threw out.

Disposing of a pooled asset

If you're disposing of an asset transferred into a pool, and the disposal date is before the pooled date, you'll need to roll back depreciation to the asset's pooled date. The asset is removed from the pool and you can then dispose of it.

If you added the new asset directly to the pool, you don't need to roll back depreciation before disposing of it.

Before you start

If your fixed assets start date in Xero is in an earlier financial year, make sure you've run depreciation up to the beginning of this financial year. For example, if your year end is 30 June and you're disposing of a registered asset on 20 August 2016, run depreciation in Xero to 30 June 2016.

Enter the disposal or sale details in Xero

  1. Go to Accounts, then click Fixed Assets.
  2. Click the Registered tab.
  3. Click the asset number.
  4. Click Options, then Dispose.
  5. Enter the disposal details.
  6. Click Show Summary.
  7. Review the disposal summary. If you change any disposal details, click Update to see the revised disposal summary.
  8. Click Review Journals and review the disposal journal for book depreciation.

    There are no journals for tax depreciation in Xero.
  9. If required, select the accounts to use for gain on disposal, capital gain or loss on disposal.
  10. Click Post.

If you've sold the asset for cash, Xero won't show the disposal on your Statement of Cash Flows report until you create a receive money transaction for the proceeds, or reconcile the cash received in your bank account to the Sale Proceeds Account on the disposal.

Actions you may need to take after disposal

After you dispose of the asset, you may need to take further action.

  • If the pool balance is negative after the disposal, or you dispose of the last asset in a pool, you may need to make a fixed asset pool adjustment.
  • If you dispose of a pooled fixed asset before your tax reporting start date in Xero, and the asset was pooled before your tax reporting start date in Xero, you may need to re-enter the pool's opening balances in Xero.

Disposal depreciation example

Your financial year end is 30 June. You’ve run depreciation up to the end of August of this financial year, and you dispose of an asset on 16 September. If you select:

  • No Depreciation - Xero reverses the depreciation for the asset for July and August.
  • All depreciation up to and including - And:
    • Enter 31 August in the Date field, Xero won’t adjust depreciation.
    • Enter 16 September in the Date field, Xero will calculate depreciation to 16 September.

Disposal details explained

  • Date Disposed - The date you sold the asset. Also used as the journal entry date.
  • Sale Proceeds - The tax-exclusive amount you sold the asset for. Enter 0 if you gave away or threw out the asset.
  • Sale Proceeds Account - The account used to reconcile the bank transaction for the sale proceeds.
  • Depreciation for this financial year - Select the option for depreciation for this asset. See the example for an explanation of how Xero processes each option.

  • Date - Date used to calculate depreciation if you select All depreciation up to and including in the Depreciation for this financial year field.
  • (Pooled assets only) Pool Proceeds - Adjust the amount of the sale proceeds applicable to the pool if the asset has less than 100% business use.