When a depreciable non-current asset is sold between entities within a group, any gain recognised on the sale is eliminated and realised through future use of the asset by the group.

Question

Quizplus · Accepted Answer

This statement is true according to accounting standards. When a depreciable non-current asset is sold between entities within a group, any gain recognised on the sale is eliminated and realised through future use of the asset by the group. This is because the asset is still within the group and its original cost basis is used to calculate its depreciation over its useful life. Therefore, any gain on the sale is deferred and realised over time as the asset is used by the group.

When a Depreciable Non-Current Asset Is Sold Between Entities Within