Poistosumma

Poistosumma is a Finnish term that translates to "disposal sum" or "write-off amount" in English. It refers to the amount of an asset's book value that is removed from a company's financial records when the asset is no longer in use or has been sold. This typically occurs when an asset is fully depreciated, becomes obsolete, or is disposed of in any manner.

When an asset is disposed of, its original cost and accumulated depreciation are removed from the balance sheet. The difference between the asset's book value (original cost minus accumulated depreciation) and the proceeds received from its sale, if any, results in a gain or loss on disposal. This gain or loss is then recognized in the company's income statement. The poistosumma represents the portion of the asset's value that is being written off.

For example, if a company sells an old piece of machinery for less than its book value, the difference is a loss on disposal. The poistosumma in this case would be the book value of the machinery that is being removed from the company's books. Conversely, if the asset is disposed of without any sale, such as being scrapped, the entire book value is considered the poistosumma and will be recognized as a loss. Understanding poistosumma is crucial for accurate financial reporting and asset management.