Derecognition triggers

Learning objectives

• Identify the events that give rise to derecognition.L1, L2
• Determine whether an asset scrapped without being sold must be derecognised.L2

Normative references

• IAS 16 §67Derecognition on disposal or when no future economic benefits are expected from its use or disposal.
• IAS 16 §69Forms of disposal (e.g. sale, entering into a finance lease, donation); date of disposal = the date the recipient obtains control in accordance with the requirements of IFRS 15 for determining when a performance obligation is satisfied.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• True or false? A machine that is permanently out of service, from which the entity expects no future economic benefits from either its use or its disposal, must be derecognised even though it has not been sold or physically scrapped.L2