Non-current assets disposal
Disposal removes an asset's carrying amount from the accounts and compares it with disposal proceeds to calculate a gain or loss. Calculate carrying amount as cost or revalued amount less accumulated depreciation and impairment. Remove that amount on disposal and compare with net proceeds; a positive difference is a gain and a negative difference a loss. The cash proceeds themselves appear in investing cash flows.
Worked example
Proceeds 70 less carrying amount 60 give a gain of 10.
Common mistake
First record depreciation up to disposal as required; remove both cost and accumulated depreciation.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |
Related terms
Also called: Disposal of non-current assets