How to scrap a capital asset

This article explains how to record the disposal of a capital asset that your business scraps.

Please note:

Scrapping an asset when no money is received

If no money is received when you scrap an asset, you can add a manual bank transaction for $0.00 (or other currency) in FreeAgent to show that the asset has been disposed of.

Select ‘Disposal of Capital Asset’ from the ‘Type’ drop-down menu.


Make sure ‘$0.00’ is entered in the ‘Value’ field.


Select the asset that you’re disposing of from the ‘Disposed asset’ drop-down menu and enter a brief description of the disposal in the ‘Description’ field.


Select 'Create and Finish' to complete the process.

The disposal of the scrapped asset will be recorded in your Capital Assets report.

The figure that’s displayed next to the disposal line item is the asset’s net book value, which is the remaining value that the asset had on the date you disposed of it. FreeAgent calculates this by subtracting the amount by which the asset had depreciated up to the date you disposed of it from the asset’s original value.


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