F8 existence assertion testing.......

It is an odd sentence. I think what they are trying to say is that the disposals should only relate to assets that once existed. Let's say the company wanted to reduce its profits. It could do this by disposing of a non-existent asset, at a mythical book value for $Nil. The list of disposals says that they disposed of an asset that cost $20,000 for $Nil (ignore depreciation for this example) Double entry: Dr Disposals account 20,000 Cr Asset account 20,000 Dr Cash $Nil Cr Disposals account $Nil Dr P&L account 20,000 Cr Disposals account 20,000 We need ot ensure that the assets had existed and we can do that by ensureing that it had been in the FAR.