You bought an asset and capitalized it. Did you give the thought that you might have actually replaced something any consideration? Why is it even important?

Matter of fact is that if you buy a new asset, it could very well be that you actually replaced something and this “something” should be written off from the balance sheet, disposed if you will. It could be up for being sold, but there should be an action you take to get rid of the asset from your accounts. 

Replacing an asset could also be a sign that the useful lives of similar assets are too long and should be replaced sooner. If think about it, if the asset was with its carrying value at something bigger than zero, consider the reasons you replaced it. Was it because it was broken? Was it because it was being fully amortized morally and it wasn’t working properly any more? If it’s the latter, reconsider the useful lives because the reality just showed that you’re most probably using such type of assets for a shorter period.

So replacing an asset isn’t just buying a new one and capitalizing it, but it’s also giving the existing assets a thought – most definitely the original asset being replaced should be written off, but there’s also indications to be taken into account for other existing assets.