Below is an explanation of how to write off a fixed asset (ie.plant & equipment).
Typically, the general ledger fixed assets are grouped together into categories like Plant & Equipment, Computers, etc. The Jim2 General Ledger will show the value of this equipment.
Most businesses keep the detail of what equipment makes up this value with their external accountant or on a spreadsheet.
Most fixed assets accounts have an associated accumulated depreciation account which tracks the value written down.
You first first need to find out the full value of the plant & equipment as well as the associated depreciation. For example Forklift cost $2,730 in 2013, and for the past 5 years was been depreciated $5 a year, so accumulated depreciation is also $2,500.
In this example you would create a general journal as follows
▪Debit Accum Depr $2,500
▪Credit Fixed Asset $2,500.
If the depreciation is less than the value, a third account will be needed. Using example above $2,500 in 2015, depreciated at $500 per year so accumulated depreciation is $1,000.
So journal for this example would be
▪Debit Accum Depr $1,000
▪Debit Equipment Exp $1,500
▪Credit Fixed Asset $2,500.
Further information:
Move Stock from Depleting to Asset