This support note applies to:
-
AE Assets (AU)
In MYOB Accountants Enterprise Assets (AE Assets) when a ledger is integrated with a AE MAS or Accounts the transactions are generated by AE Assets and posted to the accounting ledger automatically.
Examples of entries posted into the accounting ledger by AE Assets upon a sale of an asset are detailed for the following situations:
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Sale of an Asset with depreciation cost limit;
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Sale of an Asset without depreciation cost limit.
For details on how to sell an asset refer to Selling an asset in AE Assets
Sample Case
A motor vehicle is purchased on 1 February 2000 for $60,000 and sold on 31 May 2001 for $56,000. The rate used is the diminishing value method of 22.5%. Example 1 does not involve a depreciation cost limit, example 2 includes a depreciation cost limit of $55,134.
Example 1: without depreciation cost limit
Total depreciation $16,811 ($5,581+$11,230).
Being: Depreciation year one $5,581 ($60,000*22.5%*151/365.25).
Where: $60,000 is Purchase consideration, 22.5% is the depreciation rate, 151 is the number of days between 1 February 2000 and 30 June 2000. 365.25 is the number of days in a year. Depreciation year two $11,230 ($54,419*22.5%*335/365.25).
Where: $54,419 is the opening wdv at the start of year 2 ($60,000-$5581) Year one depreciation. 22.5% is the depreciation rate, 335 is the number of days between 1 July 2000 and 31 May 2001. 365.25 is the number of days in a year.
Profit on sale is calculated as: $12,811 Profit on sale ($56,000 + $16,811 - $60,000)
Where: $56,000 is the sale consideration, $16,811 is the total depreciation, $60,000 is the purchase consideration
Original cost and consideration amounts of an asset entered into AMS are net of GST. For example, if asset cost is $66,000.00 including GST only $60,000.00 is posted to the balance sheet asset account. This is done automatically when the gross amount is entered and the appropriate tax level applied to the purchase transaction.
Automatic transactions posted to the accounting ledger for example 1
|
Profit and Loss - Asset Realisation Account |
Debit |
$60,000.00 |
Original cost of asset |
|
Balance Sheet - Asset |
Credit |
$60,000.00 |
Original cost of asset |
|
Balance Sheet - Accumulated Depreciation |
Debit |
$16,811.00 |
Accumulated Depreciation |
|
Profit and Loss - Asset Realisation Account |
Credit |
$16,811.00 |
Accumulated Depreciation |
|
Profit and Loss - Asset Realisation Account |
Debit |
$12,811.00 |
Assessable profit on sale |
|
Profit and Loss - Profit on sale of Non-current Asset |
Credit |
$12,811.00 |
Assessable profit on sale |
The balance of the Asset Realisation account at this point is $56,000.00, ie the sale consideration.
Manual transaction required to finalise disposal of asset
|
Profit and Loss - Asset Realisation Account |
Credit |
$56,000.00 |
Sale consideration |
|
Balance Sheet - Bank |
Debit |
$56,000.00 |
Sale consideration |
The balance of the Asset Realisation account is now zero.
Example 2: with depreciation cost limit
Total Depreciation $15,448 ($5,128+$10,320).
Being: Depreciation year one $5,128 ($55,134*22.5%*151/365.25).
Where: $55,134 is the depreciation cost limit, 22.5% is the depreciation rate,151 is the number of days between 1 February 2000 and 30 June 2000. 365.25 is the number of days in a year. Depreciation year two $10,320 ($50,006*22.5%*335/365.25).
Where: $50,006 is the opening wdv at the start of year 2 ($55,134-$5128) Year one depreciation.
Where: 22.5% is the depreciation rate, 335 is the number of days between 1 July 2000 and 31 May 2001. 365.25 is the number of days in a year.
Profit on sale is calculated as: Assessable profit on sale $11,771.90 ($51,457.90-($55,134 - $15,448))
Being: Adjusted sale price $51,457.90 ($56,000*$55,134/$60,000)
Where: $56,000 is the sale consideration, $55,134 is the depreciation cost limit, $15,448 is the total depreciation, $60,000 is the purchase consideration
Automatic transactions posted to the accounting ledger for example 2
|
Profit and Loss - Asset Realisation Account |
Debit |
$60,000.00 |
Original cost of asset |
|
Balance Sheet - Asset |
Credit |
$60,000.00 |
Original cost of asset |
|
Balance Sheet - Accumulated Depreciation |
Debit |
$15,448.00 |
Accumulated Depreciation |
|
Profit and Loss - Asset Realisation Account |
Credit |
$15,448.00 |
Accumulated Depreciation |
|
Profit and Loss - Asset Realisation Account |
Debit |
$11,771.90 |
Assessable profit on sale |
|
Profit and Loss - Profit on sale of Non-current Asset |
Credit |
$11,771.90 |
Assessable profit on sale |
The value of the Asset revaluation reserve is $56,323.90.
Manual transaction required to finalise disposal of asset
|
Balance Sheet - Bank |
Debit |
$56,000.00 |
Sale consideration |
|
Profit and Loss - Asset Realisation Account |
Credit |
$56,000.00 |
Sale consideration |
A balance of $323.90 remains in the Asset Revaluation Reserve due to the depreciation over the life of the asset having been calculated on the depreciation cost limit instead of the actual original cost of the asset.
You may deal with this amount at your discretion.