Gain or loss on disposal
In one sentenceThe difference between what the business obtains from selling or disposing of a fixed asset and its book value on that date; it appears in the income statement.
Simply put
When you sell an asset, its price is not recorded entirely as revenue. You compare the price with the book value (cost less accumulated depreciation): any excess is a gain and any shortfall is a loss.
This amount is presented separately from operating revenue, because it does not recur like ordinary sales.
Worked example
A contracting business sold a car costing 120,000 SAR, with accumulated depreciation of 80,000 SAR, for 46,000 SAR.
Book value: 120,000 − 80,00040,000 SAR
Selling price46,000 SAR
Capital gain: 46,000 − 40,0006,000 SAR
Formula: Selling price − (Cost − Accumulated depreciation)
Don't confuse it with
RevenueRevenue comes from normal activities, while a capital gain comes from selling an asset the business was using.
in FullScreen ERP
The system calculates the capital gain or loss on sale or scrapping. Fixed assets