Considerations for Retiring Assets

When an asset is no longer in service because, for example, it was stolen, lost, damaged, sold, or returned, you retire the asset.

You can retire an asset completely if the entire asset is no longer in service or retire only part of an asset if only part of it's no longer in service.

Retirement Methods

Retire assets using one of these methods:

Method	Description	Rules
Full retirement	Retire all units of a multiple-unit asset. Retire the entire asset cost.	Full cost retirements: allowed for CIP assets. Full unit retirements: not allowed for CIP assets.
Partial retirement	Retire a specified number of units of a multiple-unit asset. Retire a portion of the asset cost.	Partial cost retirements: units remain unchanged and the retirement process spreads the retired cost evenly among all assignment lines. Partial unit retirements: The retirement process automatically calculates the retired cost. Partial retirements of CIP assets: not allowed.

Retirement Types

Retire assets using one of these three retirement types:

Type	Description	Rules
Unit retirement	Retire assets by unit, either all units or some units of a multiple-unit asset. The retirement process automatically calculates the cost retired for each unit retired.	Not allowed in tax books or for CIP assets.
Cost retirement	Retire assets by cost. The units remain unchanged and the retirement process spreads the retired cost evenly among the units.	Allowed in both corporate and tax books.
Source line retirement	Retire an asset that was imported as a source line by retiring the asset cost based on the source line.	Allowed for both partial and full retirements.

Here are some additional points to keep in mind:

For multiple partial retirements on the same asset within a period, run the Calculate Gains and Losses process between transactions.
For partially retired units of production assets, manually adjust the capacity to reflect the portion retired.