Wiley IFRS by Mirza Abbas A. & Holt Graham & Knorr Liesel

Wiley IFRS by Mirza Abbas A. & Holt Graham & Knorr Liesel

Author:Mirza, Abbas A. & Holt, Graham & Knorr, Liesel
Language: eng
Format: epub
Publisher: Wiley
Published: 2011-03-14T16:00:00+00:00


DERECOGNITION

The term “derecognition” refers to when an entity should remove an asset or liability from its statement of financial position. The derecognition requirements in IAS 39 set out the conditions that must be met in order to derecognize a financial asset or financial liability and the computation of any gain or loss on derecognition. There are separate derecognition requirements for financial assets and financial liabilities.

Derecognition of Financial Assets

Under IAS 39, derecognition of a financial asset is appropriate if either one of these two criteria is met:1. The contractual rights to the cash flows of the financial asset have expired.

2. The financial asset has been transferred (e.g., sold) and the transfer qualifies for derecognition based on an evaluation of the extent of transfer of the risks and rewards of ownership of the financial asset.



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