The first step in accounting for an asset disposal is to calculate the gain or loss on disposal.

Asset Disposal

The process of selling, donating, scrapping, or otherwise getting rid of an asset that a business no longer intends to use.

Gain

An increase in equity from incidental transactions and other events affecting the entity during a period, except those that result from revenues or investments by owners.

Loss

Refers to when a company's expenditures exceed its revenues during a specific period of time, resulting in a negative profit.