CERTYNEX IFRS ACADEMY

A service entity sells a used machine for 12,000. The machine had a cost of 40,000 and accumulated depreciation of 30,000 at the disposal date. The accountant presented 12,000 as revenue and 10,000 as cost of sales. What is the error?

The result should have been computed against cost, giving a loss of 28,000.

Only the net gain of 2,000 should be recognised in profit or loss, and it should not be classified as revenue.

The proceeds of 12,000 should have been recognised in other comprehensive income.

There is no error: the net amount in profit or loss is indeed 2,000.