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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Capital Assets

Sale, Disposal or Interagency transfer of Capital Assets
Recording Disposal of Capital Assets

A disposal of capital assets occurs when a fully depreciated asset is no longer in service and no monetary value was received. If the asset is not fully depreciated or if monetary value was received, it must be treated as a sale of the asset. To book the disposal of assets, use the following entries.

Business-Type Activities (Fund Type 05) and
Component Units (Fund Type 15)

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Reduce the Accumulated Depreciation of the Asset Being Disposed
(1) 5 U 0832CY XXX 644 CY 99999 N/A $ XX.XX   XXXX XXXX*
To Reduce the Asset Being Disposed
(2) 5 U 0832CY XXX 645 CY 99999 N/A $ XX.XX   XXXX XXXX

Accounting effect of above entries:

Debit Credit
(1) To Reduce the Accumulated Depreciation of the Asset Being Disposed    
  XXXX* General Ledger Account for Asset Depreciation $ XX.XX  
  9999 System Clearing   $ XX.XX
(2) To Reduce the Asset Being Disposed    
  9999 System Clearing $ XX.XX  
  XXXX General Ledger Account for Asset   $ XX.XX

Governmental Activities – Basis Conversion (Fund Type 11)

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Reduce the Accumulated Depreciation of the Asset Being Disposed
(1) 5 U 0832CY XXX 534 CY 99999 N/A $ XX.XX   XXXX XXXX*
To Reduce the Asset Being Disposed
(2) 5 U 0832CY XXX 535 CY 99999 N/A $ XX.XX   XXXX XXXX

Accounting effect of above entries:

Debit Credit
(1) To Reduce the Accumulated Depreciation of the Asset Being Disposed    
  XXXX* General Ledger Account for Asset Depreciation $ XX.XX  
  9992 System Clearing   $ XX.XX
(2) To Reduce the Asset Being Disposed    
  9992 System Clearing $ XX.XX  
  XXXX General Ledger Account for Asset   $ XX.XX

*For valid general ledger accounts, see Recording Depreciation of Capital Assets.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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