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When does the carrying amount of a PP&E item should be derecognized (as per IAS16)?

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Question added by Almutaz Bakry Sidahmed , Internal Audit Manager , Banan real estate
Date Posted: 2014/05/12
Rashad Moursi
by Rashad Moursi , Finance Director & Business Development, International Business Transformer Owners Repr. - Hotels , Investment and financial

 

IAS16 prescribes that the carrying amount of an item of property, plant and equipment shall be derecognized on disposal; or when no future economic benefits are expected from its use or disposal.

The gain or loss on disposal is the difference between the proceeds and the carrying amount and should be recognised in profit and loss.