Derecognition of PPE and Intangible Assets

Derecognition happens when an asset is sold, exchanged or abandoned and therefore removed from the balance sheet.

	Balance Sheet	Income Statement
Asset is sold	Asset is removed from balance sheet.	A loss/gain equal to carrying value less sale proceeds is reported on income statement.
Asset is exchanged	The old asset is removed from balance sheet. The new asset is added to balance sheet at fair value.	A loss/gain is reported in income statement equal to difference between: Carrying value of old asset and fair value of old asset Carrying value of old asset and fair value of new asset (if reliable estimated)
Asset is abandoned	Asset is removed from balance sheet.	A loss/gain is reported in income statement equal to the carrying value of the asset.