Disposal: how to treat it in accounting?
When an asset becomes unusable, disposal must be handled correctly in accounting and taxation. Practical guide 2026.
Expert note: This article was written by our chartered accountancy firm. Information is current as of 2026. For a personalised review of your situation, contact us.
Disposal: how to treat it in accounting?
Updated March 30, 2026 - The scrapping of a fixed asset occurs when an asset ceases to be permanently used by the company, without any real sale value. The subject seems technical, but it directly affects the reliability of the accounts, the net book value and sometimes the tax result.
When do we talk about disposal?
Scrapping is generally when the asset is deteriorated, obsolete, unusable or permanently removed from the operating cycle without a real sale.
To complete, see Capitalized production: accounting, Operating account and Monthly closing reinforcement.
Points to check in practice
- ▸existence of a reliable inventory;
- ▸identification of the property;
- ▸gross value and practical depreciation;
- ▸release date;
- ▸internal supporting document.
Hayot Expertise Advice: poorly documented disposal often creates inventory discrepancies and phantom assets which degrade the quality of accounts.
Accounting and tax consequences
The treatment depends on the precise situation of the property, its depreciation and the available documentation. The objective always remains the same: remove the asset properly and justify the loss of residual value.
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Conclusion
Discard should not be managed as a simple end-of-year entry. It is a subject of inventory, proof and balance sheet quality.
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(Official sources: ANC, BOFiP)
Article written by Samuel HAYOT
Chartered Accountant, registered with the Institute of Chartered Accountants.
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