IAS 38Chapter 12Lesson 1
Derecognising an intangible asset
Step 1 of 7Learning objectives
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When an intangible asset leaves the balance sheet: on disposal (sale, finance lease, donation) or as soon as no benefits are expected from it any more. The gain or loss is the difference between the net disposal proceeds and the carrying amount at the date of disposal, is recognised in profit or loss and is never revenue, and an asset that is merely unused continues to be amortised.
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Learning objectives
- Identify the two events that require an intangible asset to be derecognised.
- Date the disposal and determine the consideration used, applying the cross-references to IFRS 15 and IFRS 16.
- Calculate the carrying amount at the date of disposal (amortisation up to that date) and the gain or loss.
- Record the entries for a sale and for a retirement, and present the result outside revenue.
- Explain why an unused asset continues to be amortised, and when amortisation stops.