Derecognition date (para. BC34)

BC34 The Board decided that an entity should apply the revenue recognition principle in IAS 18 [IFRS 15 Revenue from Contracts with Customers, issued in May 2014, replaced IAS 18 Revenue and amended paragraph 69 of IAS 16 for consistency with the requirements in IFRS 15.] for sales of goods to its gains from the sales of items of property, plant and equipment. The requirements in that principle ensure the representational faithfulness of an entity’s recognised revenue. Representational faithfulness is also the appropriate objective for an entity’s recognised gains. However, in IAS 16, the revenue recognition principle’s criteria drive derecognition of the asset disposed of rather than recognition of the proceeds received. Applying the principle instead to the recognition of the proceeds might lead to the conclusion that an entity will recognise a deferred gain. Deferred gains do not meet the definition of a liability under the Framework. Thus, the Board decided that an entity doe

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