The disposal of fixed assets, including pickup trucks, is a significant decision for many businesses. This decision is often made when the old asset is no longer suitable for business operations or has been fully depreciated. This article will guide businesses through the process and accounting methods when making a company pickup truck disposal decision.
Fixed Assets & Disposal: Basic Concepts
Fixed assets are assets with a usage period of more than one year and a minimum value as prescribed. A pickup truck, if it meets these conditions, is considered a tangible fixed asset. Fixed asset disposal is the sale or removal of an asset from the business when it is no longer in use or has been fully depreciated. The company pickup truck disposal decision must comply with current regulations.
Regulations for Fixed Asset Disposal – Pickup Trucks
According to Circular 200/2014/TTBTC and Circular 133/2016/TTBTC, when making a company pickup truck disposal decision, note that:
- Assets that have been fully depreciated but are still in use should not continue to be depreciated.
- Assets that have not been fully depreciated and are damaged must have the cause and responsibility determined for compensation processing.
Accounting Guidance for Pickup Truck Disposal
The accounting for a company pickup truck disposal decision depends on the intended use of the vehicle (production and business, internal, welfare) and the depreciation status. Here is a general guide:
Vehicles used for production and business:
- Reduce the original value and accumulated depreciation if the vehicle has been fully depreciated.
- Record income from disposal to account 711.
- Account for disposal costs to account 811.
- Handle the remaining value if the vehicle has not been fully depreciated.
Vehicles used for internal purposes, projects: Use account 466 to reflect income and expenses related to the disposal.
Vehicles used for welfare: Use account 353 – Bonus and Welfare Fund.
Company Pickup Truck Disposal Process
The process when making a company pickup truck disposal decision usually includes the following steps:
- Prepare a disposal proposal based on inventory and usage history.
- Issue a disposal decision.
- Establish a disposal council.
- Determine the method of disposal (sale or destruction).
- Prepare a disposal record and complete the documentation.
Frequently Asked Questions About Pickup Truck Disposal
When should disposal occur? When the vehicle is damaged, obsolete, no longer suitable, the business merges, dissolves, etc.
Do I need to issue an invoice when disposing of a fully depreciated vehicle? Yes, an invoice must still be issued to record the transaction and comply with tax regulations.
Conclusion
The company pickup truck disposal decision must be carried out in accordance with the correct process and regulations. Accounting needs to be accurate and transparent to ensure compliance with the law and effective financial management. Contact a consultant for detailed support.
