Conceptual question – Partly Damaged Asset

My question relates to the election treatment for insurance proceeds received and <95% used to restore the asset when an asset is partly damaged.

When an election is made in the above situation, despite the election there is a part disposal (whereas when >95% insurance proceeds are used to restore the asset, upon election, there is no part disposal but the gain is deferred in much the same way as a small claims part disposal i.e. deduction of insurance proceeds received from cost of the restored asset, thereby reducing the base cost of the restored asset and effectively transferring the gain to the time when the restored asset is sold)

Now where I am getting confused is how is the gain being deferred by a part disposal in the “<95% insurance proceeds used to restore the asset and election made” situation.

If I break down the part disposal formula used in this instance. then the sales proceeds are insurance received less restoration costs (which means that by deducting restoration costs from the insurance received, the gain is going down and therefore is being deferred) but then, when calculating cost A = insurance received less restoration cost and B = Insurance received less restoration cost + Value of asset in restored condition (and we compare this A and B with the A and B in a normal part disposal i.e. A = Insurance received B = Insurance received + Value of asset in damaged state) I completely get confused. The only way the gain can then be deferred is that if the Cost calculated in this way is greater than the cost calculated in a normal part disposal which will result in a small gain and therefore the gain is deferred. Am i on the right track? or was this too confusing for you too ? 😛

The aim is to defer the gain, but how is it being deferred escapes me. Please help