Finance Train Logo
Menu

Learn

Resources

Derecognition of PPE and Intangible Assets

Derecognition happens when an asset is sold, exchanged or abandoned and therefore removed from the balance sheet.

 Balance SheetIncome Statement
Asset is soldAsset is removed from balance sheet.A loss/gain equal to carrying value less sale proceeds is reported on income statement.
Asset is exchangedThe old asset is removed from balance sheet.
The new asset is added to balance sheet at fair value.		A loss/gain is reported in income statement equal to difference between:
  • Carrying value of old asset and fair value of old asset
  • Carrying value of old asset and fair value of new asset (if reliable estimated)
Asset is abandonedAsset is removed from balance sheet.A loss/gain is reported in income statement equal to the carrying value of the asset.
Previous Lesson

Impact of Asset Impairment

Next Lesson

Disclosures Related to PPE and Intangible Assets

Data Science for Finance Bundle

Data Science for Finance eBooks Bundle
$56.99$39

Learn the fundamentals of R and Python and their application in finance with this bundle of 9 books.

Get the Bundle
01
Capitalizing Vs. Expensing Costs
02
Financial Reporting of Intangible Assets
03
Depreciation Methods for Property, Plant, and Equipment (PPE)
04
Impact of Depreciation Methods on Financial Statements
05
Depreciation – Important Points
06
Amortization of Intangible Assets
07
Revaluation Model for Fixed Assets
08
Impairment of Long-lived Assets
09
Impact of Asset Impairment
10
Derecognition of PPE and Intangible Assets
11
Disclosures Related to PPE and Intangible Assets
12
Financial Reporting of Investment Property Vs. PPE

Topics

Financial Analysis

Course Downloads

Resources

Long-lived Assets

Study Notes for Long-lived Assets

PDF