Disposal of a NCA

[abzzzz]

When disposing of a NCA, when you get up to the Acc.dep/n Ledger accounting, what figure goes in the DR column? i know the name for it is disposal of (e.g. equipment) but the figure is where i freak out...

[soopertaco]

You've probably worked this out by now but I'll try explain it for you, those who are wondering and for my own practice :p

when you have the acc depn of NCA account on the credit side normally has two entries.
You'll then have to most likely work out the extra depreciation incurred in the period before it has been disposed of. (note this extra depreciation expense is for the WHOLE value of the NCA)

Now to get to your question. To find out the depreciation you have to transfer to the disposal of NCA account, which is located on the debit side of the Acc Dep'n of NCA account you have to know THREE things.
1. If the business is NOT disposing of the WHOLE value of the NCA, how much of that NCA is being disposed of.
2. How much of that NCA is being disposed of at that point in time.
3 How long has the business held that value of NCA - this is normal identified by "the business bought this asset on 30th march 2008" (for a hypothetical sake)
Now with knowledge of these three pieces of information, you just focus on the particular value that is being disposed of working out the accumulated depreciation solely for that value.

Hopefully I explained this clear enough.
P.S if you're looking for an example of this check out VCAA '08. If I remember correctly it was there in one of the questions, it could be '09...hmm

[MaddehZ]

yeah what ^^^^ said, you have to deduct all the depreciation that was been accounted for up until the time of sale