Sale of assets

• What is sale of assets

  when a business sells assets which are no longer required
• When might a sale and leaseback arrangement be made?

  If a business wants to continue using an asset but needs cash
• Benefits of sale of assets

  Assets depreciate in value - Selling assets means the business will get the money before they depreciates in value

  poor quality assets can be sold to buy better quality assets - Such as new machinery which also means more money will be saved in the long term and able to do the job more efficiently
• Drawbacks of sale of assets

  Lose benefit of asset - selling the asset it means that the business can no longer benefit from the function of the asset and could be a decrease in productivity if asset is not replaced

  
  

  Assets are no longer on balance sheet - will result in a reduction in the value of the non-current assets that a business has