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Hi!
I am having some difficulties to understand subsequent expenditure, more precisely
could you explain how(the logic) “the carrying amount of the item being replaced is derecognised when the replacement takes place”.What does “derecognised” mean in this context?
Thanks.
If there’s an asset with, say, a boiler, a filter, a suppressor and a dynamo and we need to replace the dynamo …
… first of all remove (derecognise) the carrying value of the existing dynamo that is being replaced and then add on the cost of the replacement dynamo
Does that explain it for you?
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