Network Decommissioning Cost
Recording the cost of removing and disposing of obsolete 2G/3G network equipment.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accumulated Depreciation (2G Network) | Contra-Asset (-) | 8,000,000.00 | - |
| Network Equipment (2G Cost) | Asset (-) | - | 10,000,000.00 |
| Loss on Network Decommissioning | Expense (+) | 2,000,000.00 | - |
💡 Accountant's Note
Technology migrations require decommissioning legacy networks. If equipment is not fully depreciated at disposal, the net book value is recognized as a loss. Decommissioning costs (removal, disposal) are expensed.
Practitioner & Systems Framework
💻 ERP Architecture
Network decommissioning is managed as a programme in the project management system. Each site or equipment item decommissioned triggers a disposal transaction in the fixed asset module — the original cost and accumulated depreciation are removed, and any remaining NBV is recognised as a loss on disposal. Physical equipment removal costs (contractor labour, transport, disposal fees) are expensed separately. Salvage value recovered from selling scrap equipment is a credit against the decommissioning expense. The network decommission register tracks the status of each decommissioned site against the programme timeline.
⚠️ Audit Flags
Auditors test the completeness of decommissioning write-offs — all 2G/3G equipment physically removed should be derecognised from the asset register in the same period. Confirm that the NBV written off matches the asset register records. Assess whether a decommissioning provision should have been recognised earlier (IAS 37 — was the obligation present before the formal decommissioning decision?). Review salvage proceeds for reasonableness. Confirm decommissioning does not trigger any lease termination costs for sites being vacated.
📄 Required Documentation
Decommissioning programme plan, site-by-site disposal records, fixed asset register write-off entries, salvage proceeds receipts, decommissioning contractor invoices, lease termination assessment for vacated tower sites, and decommissioning cost provision assessment (IAS 37).
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