04-01-2009, 08:04 PM
Dear,
The figure of loss has to be the balancing figure. There is no question on it. It is fully discussed by IAS-16. I refer you to study the "De-recognition" paragraphs (from 57 to 72) to understand it. For clarity I quote two paragraphs of IAS-16 (IFRS volumes updated 2008).
Paragraph 68 states
"The gain or loss arising from the derecognition of an item of property, plant and equipment shall be included in profit or loss when the item is derecognized (unless IAS 17 requires otherwise on a sale and leaseback). Gains shall not be classified as revenue."
Paragraph 71 states
"The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item."
Since the proceed from disposal has to be taken the fair value of traded out asset (AS IT IS EXCHANGED BUT NOT SOLD), the difference of carrying amount (16,000) and proceed (12,000) will result in etermination of gain or loss.
I hope you will pick the concept.
Regards,
KAMRAN.
The figure of loss has to be the balancing figure. There is no question on it. It is fully discussed by IAS-16. I refer you to study the "De-recognition" paragraphs (from 57 to 72) to understand it. For clarity I quote two paragraphs of IAS-16 (IFRS volumes updated 2008).
Paragraph 68 states
"The gain or loss arising from the derecognition of an item of property, plant and equipment shall be included in profit or loss when the item is derecognized (unless IAS 17 requires otherwise on a sale and leaseback). Gains shall not be classified as revenue."
Paragraph 71 states
"The gain or loss arising from the derecognition of an item of property, plant and equipment shall be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item."
Since the proceed from disposal has to be taken the fair value of traded out asset (AS IT IS EXCHANGED BUT NOT SOLD), the difference of carrying amount (16,000) and proceed (12,000) will result in etermination of gain or loss.
I hope you will pick the concept.
Regards,
KAMRAN.
