| LO6 – Account for the derecognition of PPE assets. |
Property, plant, and equipment is derecognized when it is sold or when no future economic benefit is expected. The cost and any related accumulated depreciation are removed from the accounting records. To account for the disposal of a PPE asset, the following must occur:
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1. |
If the disposal occurs part way through the accounting period, depreciation must be updated to the date of disposal by this type of adjusting entry: |
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2. |
The disposal, including any resulting gain or loss, is recorded by this type of adjusting entry: |
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A loss results when the carrying amount of the asset is greater than the proceeds received. A gain results when the carrying amount is less than proceeds received.
- 18010 reads
