I Explain the derecognition of PPE and intangible assets

Question 1

Derecognition(removing Long lived asset from BS - when assets are sold, exchanged, abandoned)

Answer 1

Sold. CV; original cost - depr - impairment charges, + sale proceeds = G or L on IS

Proceeds from selling a long-lived asset are an investing CF, so under an indirect CF method we would remove the G or L from NI to compute CF from operations

An abandonment is similiar, but see’s no proceeds. Instead, the CV is removed from BS, and a loss of the CV amount is recognized on the IS.

If an exchange takes place, the CV’s are compared, and the G or L is recorded as a new asset at fair value on the BS, the the CV of the old asset is removed.