Disposal of Plant Assets

This video explains how to account for the disposal of plant assets. The procedure for accounting for the disposal of a plant asset through sale or retirement is (a) record depreciation expense up to the date of disposal; (b) eliminate the book value of the plant asset at the date of disposal; (c) record cash proceeds, if any; and (d) account for the difference between the book value and the cash proceeds as a gain or a loss on disposal.