Gain on disposal of fixed assets is a term used for the difference between the sale price of an asset and its cost. When a company sells a long-term asset, the gain on that transaction is usually recorded as income. It can also refer to the recognition of other economic gains that result from the sale or disposal of an asset, such as the related tax advantages or changes in working capital associated with the disposal. Recording these gains allows companies to accurately measure the overall performance of their operations, thus enabling them to make more informed financial decisions.