How do you scrap a fixed asset in Turkey? Scrap report, approval and write-off steps

There is always a corner of the back storeroom: monitors with cracked screens, printers that do not work, devices waiting for repair that nobody takes responsibility for. In the inventory list, though, they are still marked “Assigned” or “Faulty”. When the asset count comes round, nobody can explain what happened to these devices; they are in the register and in the storeroom, but they are not used and it is not clear who they belong to. The same question is asked every year, and the answer is carried over to the next. The hard part is not throwing the device away but documenting it: who decided, on what basis, and when was it removed from the register? In this article we explain the steps for scrapping a fixed asset in a company in Turkey, the details a scrap report should contain and the limit question under Turkish tax law.

Scrapping a fixed asset means taking a fixed asset that has reached the end of its useful life, cannot be repaired or is not worth repairing out of use on the basis of a technical opinion, an authorised approval and a written record, and removing it from the inventory register. The process has two sides: the operational side (identifying the device, approval, the record, disposal) and the accounting side (removal from the books, tax consequences). This article mainly covers the first.

How do you scrap a fixed asset step by step?

1. Record the situation. Who reported the fault, and when? Who had the device last? This information is the first line of the report.
2. Get a technical opinion. IT, maintenance or the relevant service provider should state in writing whether the device can be repaired and whether the repair is worthwhile.
3. Close the assignment. If the device still shows as assigned to an employee, take it back and close the assignment; the record should not stay under anyone’s name.
4. Separate and label the device. Devices to be scrapped must not get mixed up with working ones; they should be kept in a separate area with an “awaiting scrap approval” label.
5. Prepare the report. Fill in the scrap report with the details in the template below.
6. Get approval. Decide in advance who approves, depending on value and type; do not move on to disposal until all signatures are in place.
7. Notify accounting. Send the information needed for removal from the books (assignment number, purchase date, report) to your accountant or accounting team.
8. Dispose of the device. Sale, recycling or destruction; for devices that hold data, check separately that the data has been wiped.
9. Close the record. Set the status in the inventory record to “Scrapped”, add the closing date and the report number, and keep the documents.

Questions to ask before scrapping

Not every broken device has to be scrapped. Answering these questions before deciding reduces both unnecessary scrapping and unnecessary repair work:

• Can the fault be repaired, and is the repair worthwhile compared with buying a new device?
• Can the device’s parts be used to repair another device? If so, will they be entered into parts stock?
• Could the device be used in another department under a lighter load?
• Does the manufacturer or service provider still supply parts and support for the device?
• Is there company data on the device? If so, who is responsible for wiping it?
• Which option will be used, sale, recycling or destruction, and who will carry it out?

Sample fixed asset scrap report: what information does it contain?

The format of the report varies from organisation to organisation; the fields below offer a common and practical framework:

Is there a limit for scrapping fixed assets in Turkey?

The question is asked in two different ways, and the answers differ too.

• Internal approval limit. Who approves the scrapping of an asset of a given value is set by the company’s own authority matrix. For example, a department manager may approve low-value devices, while senior management or finance approves high-value ones. Writing these thresholds down in advance removes the debate from every scrapping decision.
• The amount on the tax side. Article 313 of Turkish Tax Procedure Law No. 213 states that tools, equipment, furnishings and fixtures used in a business whose value does not exceed a certain amount may be expensed directly without being depreciated. Because this amount is reset from time to time, the figure in the text of the law may be out of date; we do not give a figure in this article. Ask your accountant for the current amount and what it means in your case.

As an example of an internal approval limit, a simple authority matrix such as the one below can be used. The groups and approvers are examples only; adapt them to your own organisation.

In the text of the Tax Procedure Law that we reviewed, we found no separate provision tying the scrapping of a fixed asset to a specific amount. Even so, different rules may apply to public bodies or organisations subject to special regulation, so confirm the rules that apply to you with your adviser.

A short example: a printer that does not work

In an office, the printer on the second floor keeps jamming. An employee reports it and a record is opened. The service technician states in writing that it has reached the end of its useful life and that repair would cost close to a new device. Facilities closes the assignment, moves the device to a separate corner and prepares the scrap report. Finance approves, and the book value information is sent to accounting. The device is handed over to a recycling company and its status is closed as Scrapped in the inventory. The result: at the year-end count, nobody has to hunt for answers about this printer, because the date, reason and approval of every step are on record.

Where does scrapping on Excel and paper stall?

In a small business, the report may be a Word template and the inventory an Excel sheet; if a few devices are scrapped each year, that works. Problems arise in three places: the report is signed but the device stays “Assigned” in the sheet; the device is sent for repair, nobody tracks its return, and it shows as “In Repair” for months; the reports are scattered across different folders, and at the count people argue over whether a device was scrapped or lost. The solution is to keep the status in one place and add a date and a note to every change. Even if you stay with Excel, filling the “status” column from a fixed list (idle, assigned, in repair, faulty, scrapped, lost) rather than with open-text entries, and updating the date column with every change, helps reduce the number of devices that go missing in between.

From faulty to scrapped in KurumsalPortal

In the Asset & Assignment Management module, each fixed asset has a barcoded inventory card and is tracked with one of the statuses Idle, Assigned, In Repair, Faulty, Scrapped and Lost. Fault, repair and scrap movements build up in the card’s movement history, so you can see on one card who has had a device, when it failed, whether it went for repair and when it was scrapped. Tracking lost and scrapped assets as separate statuses keeps you from mixing up two different outcomes at the count.

The module is not there for accounting entries but for tracking the asset’s lifecycle. Closing the inventory record on the same date as the report you send to accounting helps keep the two records in line. You can bring your existing Excel list into the module with bulk import, then export an XLSX report and use the current list for counts and audits. You can find information on KurumsalPortal’s other modules on the KurumsalPortal page.

To track your faulty, in-repair and scrapped fixed assets on one card, take a look at the Asset & Assignment Management page.