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Under what head will the profit or loss on sale of fixed assets be recorded in the financial statements? It must come in the Profit or loss statement right, as the gain/(loss) is that of a realized one.
There’s no reason that it shouldn’t have its own heading
However, if you think about this for a moment, that gain or loss on disposal is the result of an “incorrect” accumulated depreciation over the life of the asset from acquisition until disposal
If the depreciation had been exact, there wouldn’t have been either gain or loss on disposal
So, in effect, it’s an adjustment / correction to previous years’ depreciation charges
And where would those previous years’ depreciation charges have been included?
Probably within the figure for Cost of Sales
OK?
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