Accounting question - Fixed asset

[calibrax]

An asset has been written off as obsolete (so the asset is no longer on the company books, and a charge was taken for the remaining NBV in, for example, 2003).

The asset sits in the corner of the warehouse gathering dust (it has zero value to the company).

If the company then receives an offer in 2005 to purchase the asset, how should the sale be accounted for?

[Didwot]

It will be a disposal with a cost value of nil producing 100% profit.

[Oneeyedtic]

Given the accounting atheletics which you relate, you do not end up with an asset but with a heap of rubbish sitting on the warehouse floor - a hazard which if a Health and Safety Inspector came along might give rise to you being prosecuted. However, you were fortunate enough to receive some money for the rubbish. If this money was paid by cheque then it must go through the company accounts, but if paid in cash then an anonymous donation to the Workers Xmas Party Fund would be more in order.