disposing of an asset

when the continuation of depreciating a long term tangible -sset at a diminishing value becomes unprofitable or purposeless, so the company decides to dispose of the -sset at a stipulated cost which is below book value resulting in a loss which is then offsetted against the companies profits. a transaction of this nature is usually made when the -sset becomes dormant and ineffective, even though it may well still be in the beginning of its life expectancy. the disposing of as -sset is also written off the balance sheet as a long term investment and making way for a more effective and valuable long term -sset.

if there is capital to be made on disposing of an -sset, then both parties agree to a value where under the table cash transactions are made (off the books) and a much lower value is agreed upon (on the books) which is then recorded as a loss and offsetted against the companies net profit.
rupert murdoch: “i got rid of alex!” james sighed, “i thought he was an -sset, turns out he was nothing but a liability”
alan bond: “what do you mean you got rid of him, hope you didn’t kill him”
rupert murdoch: “nah, there’s no gain from killing him, i sold him to the opposition and i made a profit”
alan bond: “ahhhh, now i can see how wendi deng has asianized you”
rupert murdoch: “what do you mean by that?”
alan bond: “nothing!, you know hoe asians are carnivorous when it comes to money, it looks like it’s rubbing off on you”
rupert murdoch: ” yep, learn alan, disposing of an -sset requires a lot of foot work if you know what i mean”.