Reclassification of Fixed Asset to Account 286

Fixed assets that have been decided for sale need to be reclassified from the Fixed Asset Inventory to Inventory - Non-current assets held for sale (account 286), and subsequently sold as inventory.

If you need to transfer the carrying value of a fixed asset to debit Account 286 "Inventory - Non-current assets held for sale," follow these steps:

1. Click on the button which opens the Search function, enter Fixed Asset Movements, select the appropriate link.
2. Create a new FA Movement Act.
3. Specify Act Type = Reclassification for Sale.
4. Enter FA Location Code.
5. In the movement line, select the FA which you want to reclassify.
6. Specify the values in the Signatures and Dimensions fields as needed.
7. Post the FA Movement Act document.

As a result of posting such an FA Movement Act automatically:

• The book value of the FA is transferred to the Depreciation Book for sale (286).
• The salvage value of FA is reversed.
• The FA status changes to "For disposal".

Note: Fully depreciated fixed assets are not reclassified to inventory - non-current assets held for sale (account 286). The sale of such fixed assets is recorded in the depreciation book where the fixed asset is being accounted for.

Cancellation of reclassification for sale

If you need to cancel posted reclassification for sale, do the following:

1. For the involved Depreciation Books, the setting Mark Errors as Corrections must be enabled.
2. For each FA in the Depreciation Books that were involved in the reclassification, find in the FA Ledger Entries the entries that were created at the time of posting the FA movement.
3. Use the Cancel Entries function.
4. Open Fixed Asset G/L Journals where lines for the financial reversal of the canceled transactions will be automatically created. If a salvage value was assigned to the FA, open the Fixed Asset Journals.
5. Post the created journal lines.

As a result:

• The book and salvage values will return to the depreciation book from which they were reclassified.
• The depreciation amount written off during the reclassification will be restored.
• The transactions will be moved to the Error Ledger Entries.
• The status of the FA will revert to what it was before the reclassification.