IFRS 15 Sale of Non financial assets
INTRO IFRS 15 Sale of Non financial assets – Certain aspects of IFRS 15 apply to the sale or transfer of non financial assets (such as intangible assets and property, plant, and equipment) that are not an output of the entity’s ordinary activities. [IAS 16, IAS 38, IAS 40]
When an entity sells or transfers a non financial asset that is not an output of its ordinary activities, it derecognises the asset when control transfers to the recipient, using the guidance on transfer of control in IFRS 15 (see Transfer of control from Step 5 IFRS 15 in the link).
The resulting gain or loss is the difference between the transaction price measured under IFRS 15 (using the guidance in Step 3 of the model) and the asset’s carrying amount. In determining the transaction price (and any subsequent changes to the transaction price), an entity considers the guidance on measuring variable consideration – including the constraint, the existence of a significant financing component, non cash consideration, and consideration payable to a customer (see consideration payable to a customer from Step 5 IFRS 15 in the link).
The resulting gain or loss is not presented as revenue. Likewise, any subsequent adjustments to the gain or loss – e.g. as a result of changes in the measurement of variable consideration – are not presented as revenue.
Judgment required to identify ordinary activities