CERTYNEX IFRS ACADEMY

Quirane sells an investment property and undertakes to guarantee the buyer against structural defects for two years. The property is derecognised at the date of disposal (case facts). What does it do with its guarantee commitment?

It deals with it under the standard applicable to provisions and liabilities, independently of the derecognition of the property.

It ignores it, since the property has been derecognised.

It adds it to the carrying amount of the property before calculating the gain or loss on disposal, with no further analysis.

It shifts it to the buyer, who becomes solely responsible as soon as the sale is made.