Assets are economic resources owned or controlled by a business or an individual that can provide value in the future. Assets are very important and can enable owners to make good money if sold at a very amazing price. But there are some instances when a property may need to be disposed of due to a good number of reasons.
An asset valuation and disposal company help go through the company’s financial records and determine which assets need to be disposed of. The asset can be disposed of through sales and if the property is still of some value then it can be sold at a gain which will be of benefit to the company. In an instance where the asset is of no value, it can be sold at a loss which will affect the company’s financial records poorly.
What is asset disposal?
Asset disposal is the elimination of a company’s long-term asset from the company’s accounting records. These assets are directly linked to the company’s capital’s assets and they are responsible for the success of the company’s business tasks and setups.
For companies who have no clue about making gain when disposing of an asset; they can use the services of an asset valuation and disposal company. Asset disposals equally aid in bringing company records up to date. Asset disposal may come up as a result of many different reasons:
Reasons for an asset disposal
Many reasons can cause a company to evaluate and dispose of the asset. Some clients value their data security and privacy during any transactions and that must be respected.
• An asset can be disposed of because it no longer works and cannot be reclaimed
• The asset may be old, depreciated and may no longer be up to the company’s criterions
• The asset may no longer be of use to the company
• The asset could get missing especially in cases of theft
• When maintenance of the asset becomes more expensive to maintain than the value it yields, the company is forced to dispose of.
Companies need to keep track of their assets for the financial statements
Keeping track of an asset is the sole and important responsibility of any business whether big or small. Some of the essential information that has to be documented includes; maintenance, disposal, and physical disposition. All this information helpful to account for the financial liability of the company and how much worth the asset is to the company and if the disposal is the best option to go for.
Assets are always of worth to companies and individuals when they are new but the come a time when it can depreciate. The asset disposal will affect the company’s financial record, the balance sheet and the list of a capital asset. If the asset is disposed of through sales with either a gain or loss, it has to be recorded in the income statement of the company’s financial records.