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Kim Smith.
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RazaHussain7292
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If we sold a non-current asset (Property) has a carrying value of $ 500,000. Property is held at cost less depreciation model. On 30-Sep-2020 we sold it for $ 750,000, bit at that date its fair value was 600,000.
Now please guide if we should recognize $ 250,000 (750,000 -500,000) as profit on sale?
Or we should recognize profit of $ 150,000 (750,000 – 600,000) and $ 100,000 (600,000 – 500,000) will be recognized in other comprehensive income?Please guide. Thanks
Kim Smith
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IFRS 13 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”.
So proceeds cannot be so markedly different to fair value.
In any case, proceeds are the proceeds and the profit/loss is the difference between proceeds and carrying amount.
RazaHussain7292
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