Derecognition
The applicable IFRS standard determines when and how derecognition occurs. The Conceptual Framework discusses faithful representation of both any retained rights and obligations and the change resulting from the transaction. Financial asset derecognition follows IFRS 9’s specific transfer, risks-and-rewards and control requirements; property disposal follows IAS 16. Do not substitute one standard’s detailed test for every type of item.
Worked example
An entity sells an item of equipment with a carrying amount of $40,000 for $50,000 and derecognises it under IAS 16. Subject to disposal costs and other relevant facts, it recognises a $10,000 gain, not $50,000 revenue from ordinary sales.
Common mistake
Calling the full sale proceeds revenue in every disposal, or removing a transferred receivable without applying IFRS 9’s derecognition tests.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |