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+--- Thread: IAS 39 Capital gain and seling exp (/showthread.php?tid=6936)
IAS 39 Capital gain and seling exp - ahsanalpha - 12-07-2009
I need reference from IAS 39 about adjustment of selling expense with capital gain on sale/ disposal of investment (any class i.e. AFS, AFV , HTM)
- Muhammad Amir - 12-11-2009
Who told you that selling expenses can be set off against gain on investments?
- ahsanalpha - 12-12-2009
Refer to the adjustment of related selling expense with capital gains/ losses (gains and losses on disposal) are discussed here under in IAS 1 (34).
Offsetting
32 An entity shall not offset assets and liabilities or income and expenses, unless required or permitted by an IFRS.
33 An entity reports separately both assets and liabilities, and income and expenses. Offsetting in the statements of comprehensive income or financial position or in the separate income statement (if presented), except when offsetting reflects the substance of the transaction or other event, detracts from the ability of users both to understand the transactions, other events and conditions that have occurred and to assess the entityâs future cash flows. Measuring assets net of valuation allowancesâfor example, obsolescence allowances on inventories and doubtful debts allowances on receivablesâis not offsetting.
34 IAS 18 Revenue defines revenue and requires an entity to measure it at the fair value of the consideration received or receivable, taking into account the amount of any trade discounts and volume rebates the entity allows. An entity undertakes, in the course of its ordinary activities, other transactions that do not generate revenue but are incidental to the main revenue-generating activities. An entity presents the results of such transactions, when this presentation reflects the substance of the transaction or other event, by netting any income with related expenses arising on the same transaction. For example
(a) an entity presents gains and losses on the disposal of non-current assets, including investments and operating assets, by deducting from the proceeds on disposal the carrying amount of the asset and related selling expenses; and
(b) an entity may net expenditure related to a provision that is recognised in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and reimbursed under a contractual arrangement with a third party (for example, a supplierâs warranty agreement) against the related reimbursement.