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1. Why use carrying amount of $4.2m to derecognise the asset instead of FV of $5m ?
2. “A gain or loss should be recognised in relation to the right transferred ”. Is it the same if I write “recognise a gain or loss in Statement of Profit or Loss (SOPL) up to the amount transfer to the third party”?
3. Why the answer scheme wrote that we do not recognise the $0.8 million gain in SOPL calculated by CEO ?
You need to give enough detail to allow other users to understand your post in future – not all users are using your BPP kit.
I think you need to review our notes and lecture on sale and leaseback
Point 1 – you have to derecognise anything at its existing CA
Point 2 – what you are saying is fine
Point 3 -Because we are instead recognising the gain you are discussing in point 2