Dispose of or sell an asset

Record disposal of an asset you sold, gave away, or threw out.

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 31 December and you're disposing of a registered asset on 20 August 2016, run depreciation in Xero to 31 December 2015.

Enter the disposal or sale details in Xero

You need to have the Advisor user role to register fixed assets, make changes to registered fixed assets, run depreciation, and dispose of assets.
  1. In the Accounts menu, select Fixed Assets.
  2. Click the Registered tab.
  3. Click the asset number.
  4. Click Options, then Dispose.
  5. Enter the details of the disposal. Enter 0 if you gave away or threw out the asset.
  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.
  9. Review the journal. 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.

Disposal details explained

  • Date Disposed - The date you sold the asset. Also used as the journal entry date.
  • Sale Price - 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 this asset.
  • Date - Date used to calculate depreciation for this financial year if All depreciation up to and including is selected.

Disposal depreciation examples

Xero may add or reverse depreciation depending on the options and date you use when recording the disposal.

For example, your financial year end is 31 December. You’ve run depreciation up to the end of February of this financial year. You dispose of an asset on 16 April of your financial year.

If you use full month averaging method, and select:

  • No Depreciation - Xero reverses the depreciation for the asset for January and February.
  • All depreciation up to and including - And:

    • Enter 28 February, Xero won’t adjust depreciation.
    • Enter 16 April, Xero will calculate depreciation to 31 March - the latest full month you owned the asset.
    • Enter 31 January, Xero will reverse depreciation for February.

If you use actual days averaging method, and select:

  • No Depreciation - Xero reverses the depreciation for the asset for January and February.
  • All depreciation up to and including - And:

    • Enter 28 February, Xero won’t adjust depreciation.
    • Enter 16 April, Xero will calculate depreciation to 16 April.
    • Enter 31 January, Xero will reverse depreciation for February.