( Expert )
01 April 2010
since the asset is fully dep., the amt of dep is same as cost of asset or net dep amt of asset. It means that the book value of the asset will either the scrap value or zero if the scrap value is nil.
now, if Direct method of providing dep is followed and the asset is discarded then the full book value, if any, will be loss and must be Dr. to P/L A/c.
P/L A/c Dr. XX
To Asset A/c XX (BV)
But if the book value is zero and the asset is discarded, there is no profit no loss and hence no entry is required to be passed.
In case the asset is scrapped, it means that the business can recover its scrap value in ehich case again there is no profit no Loss.
In case of indirect method of providing dep (PFD method) the abovementioned entry will be passed as under :
PFD A/c Dr. XX
P/L A/c Dr XX (if any)
To Asset A/c XX
If u hv any further doubt, u may revert back to me.
Regards, CA Shakuntala Chhangani