Lessons
- Capitalizing Vs. Expensing Costs
- Financial Reporting of Intangible Assets
- Depreciation Methods for Property, Plant, and Equipment (PPE)
- Impact of Depreciation Methods on Financial Statements
- Depreciation – Important Points
- Amortization of Intangible Assets
- Revaluation Model for Fixed Assets
- Impairment of Long-lived Assets
- Impact of Asset Impairment
- Derecognition of PPE and Intangible Assets
- Disclosures Related to PPE and Intangible Assets
- Financial Reporting of Investment Property Vs. PPE
Derecognition of PPE and Intangible Assets
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:
|
| 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. |