Derecognition of PPE and Intangible Assets
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Derecognition happens when an asset is sold, exchanged or abandoned and therefore removed from the balance sheet.
| Balance Sheet | Income Statement | |
| Asset is sold | Asset is removed from balance sheet. | A loss/gain equal to carrying value less sale proceeds is reported on income statement. |
| Asset is exchanged | The 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:
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| Asset is abandoned | Asset is removed from balance sheet. | A loss/gain is reported in income statement equal to the carrying value of the asset. |
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