When to derecognize an asset

An asset is derecognized upon its disposal, or when no future economic benefits can be expected from its use or disposal. Derecognition can arise from a variety of events, such as an asset’s sale, scrapping, or donation.

A gain or loss can be recognized from an asset’s derecognition, though a gain on derecognition cannot be recorded as revenue.  The gain or loss on derecognition is calculated as the net disposal proceeds, minus the asset’s carrying value.

Related Courses

Fixed Asset Accounting 
How to Audit Fixed Assets