How should I show the costs (eg legal fees, estate agent fees) associated with selling a fixed asset (ie property)?
Using a purchase invoice - for example a purchase invoice from the solicitor
How should you show the cost? Do you mean how should you record the cost?
I personally charge selling cost to the asset itself
Dr: Asset
Cr: Cash (Payment) or Supplier (Invoicing)
This raises the carrying cost of the asset, which has an impact on the profit or loss from its sale. The focus should be on the profit or loss from the asset’s sale. There are several ways of generating a report of the list of transactions associated with the sale.
Thank you @Abeiku. That sounds a good approach.
I was going to show the gain on sale as “Other income” (ie a separate group) in the P&L and wondered whether to show the associated costs as “Other expenses” or to include as negative “Other income”? The costs are currently included as “Payments” in the bank account awaiting allocation to an account.
If the asset’s historical costs are material, it’s better to show it on a different costs line.
Same idea as with revenues from discontinued operations.
Read the Guide about disposing of fixed assets.