Inactive Assets

SUGGESTED

Hello,

I have taken over Fixed Assets for my company.  We have several assets that are inactive.  Can these assets be disposed?  Some of them still have a NBV and some dont. 

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    SUGGESTED

    Hello Carla

    The question really is, why were they inactivated?

    I would not recommend the disposal. Inactivating asset is closer to deleting them than a disposal. If you reactivate the assets then disposed them, there will be a calculation on those assets, which could affect your current reporting.

    If you really do not want to see them anymore, deleting them would be the safest course because that will not affect your current reporting.

    Without looking at each asset and making a determination on whether it needs to be there or not, it is difficult for me to recommend anything else.

    ~Delray

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    I often see assets get inactivated for a few reasons:

    1. The assets were added in error (wrong company, etc.)
    2. An asset was "split" into multiple assets, meaning two new assets were created, and the original was inactivated.
    3. Or, on the flipside, multiple assets were combined into one, with a new aggregated asset being added as a new asset, and the original, split assets were inactivated.

    Inactivating the asset keeps the history in there for audit purposes, but removes the asset from any reporting, calculations, etc. It's a safer option than deleting, but has the same effect.  The only reason you would now need to dispose of these inactivated assets is if someone inactivated them in error, instead of disposing. In the unlikely event that that situation occurred, the only risk I see would be if the corresponding disposal entry wasn't made on the general ledger. But, if that was the case, it would have likely been identified on a reconciliation between SFA and your GL.

    TL/DR - assuming the person who was managing fixed assets before you had a decent understanding of how the system functions, the assets were likely inactivated for a reason and it's unlikely any further action is needed.