Selling or Scrapping Equipment: Close the Asset Records
Record exactly what happened to the equipment, when it happened and what was received or paid. Link the sale, scrap or transfer evidence to the asset ID, then have the accounting and tax entries checked before closing the record. Money arriving in the bank is only one part of the disposal file; it is not automatically the gain or loss.
What you’ll get from this guide: Prepare a disposal pack that reconciles cash and preserves the asset history for review.
- Connect the disposal evidence to the original asset ID.
- Reconcile gross proceeds, fees and net cash separately.
- Close the record after reviewed entries, while keeping the history.
A sold machine may be gone from the workshop while its record is still active in the accounts. Use this checklist as soon as it is sold, scrapped, lost or moved out of business use, while the documents and people involved are still easy to find.
Identify the asset and the event
Use the asset ID and serial number from the equipment register. Record the actual date and what happened. A sale, destruction, theft and proposed private transfer should not all be described as “disposed”.
For a sale, keep the agreement, invoice and buyer details needed to explain the transaction. For scrapping, retain collection evidence and condition records. If the evidence is incomplete, say what remains missing rather than treating a blank proceeds field as proof of no proceeds.
Fictional equipment disposal files. Amounts are the actual example cash movements.
| File item | Asset A014 sold | Asset A018 scrapped |
|---|---|---|
| What happened | Sold through a marketplace | Collected by recycler |
| Source evidence | Sale agreement and asset serial number | Collection receipt and condition photos |
| Gross proceeds | $2,200 | $0 |
| Fee or collection cost | $110 selling fee | $85 collection fee |
| Net cash movement | $2,090 received | $85 paid |
| Still to review | Book removal, tax treatment and GST | Book removal, tax treatment and evidence |
$2,200 − $110 = $2,090. Neither that net receipt nor the $85 payment is a computed taxable gain or loss.
Reconcile the money without calling it profit
Record gross sale proceeds, selling costs and the amount received. Link a marketplace payout to its transaction statement if fees were deducted before payment. Include any refund, trade-in allowance or insurance proceeds as separate items for review.
The cash received is not automatically the accounting gain or the tax result. The relevant carrying values, previous treatment and event all matter. Keep them as separate fields instead of subtracting an old purchase price and labelling the result a tax loss.
Retrieve the existing schedules
Find the purchase invoice, later additions, use history and most recent book and tax schedules. The ATO's asset records guidance includes information needed when a balancing adjustment event occurs. Your agent must assess the actual event and applicable rules; this checklist does not calculate that adjustment.
An asset previously written off still needs a disposal record. Keep the proceeds and history even when one schedule shows zero value.
Equipment disposal checklist
Copy this blank template into your own files. Your records stay with you.
Close the active row and preserve the archive
Have the entries checked, record who completed them and link the final schedules. Mark the asset inactive in the operational register so it is no longer counted as available equipment. Keep its supporting file under the same ID.
Follow the relevant record-keeping requirements for retention, including any longer period applying to the asset or a review. Check that the archive can still be opened after changing accounting software.
Key takeaways
- Connect the disposal evidence to the original asset ID.
- Reconcile gross proceeds, fees and net cash separately.
- Close the record after reviewed entries, while keeping the history.
Where to get help
Your accountant or bookkeeper can help close the accounting record. Ask a registered tax agent about disposal treatment, and a practitioner with the relevant GST scope about any GST entry. The tax records hub connects the purchase, use and disposal workflows.
Where to go from here
Asset Register Template: Track Business Equipment
Update the equipment register after the entries are checked.
3 min readRepair or Improvement? Gather the Facts Before Coding It
Keep earlier repairs and modifications with the asset history.
2 min readRecord Keeping for Small Business: What to Keep and for How Long
Explore a related question linked in this guide.
9 min read
General information only. This guide doesn't take your personal or business circumstances into account and isn't financial, legal or tax advice. Rates and thresholds change — check the official sources linked in this guide and get qualified advice where your circumstances require it.