Disposal of non-current assets

Disposal of a non-current asset removes its cost and accumulated depreciation from the books, and compares sale proceeds with carrying amount to record a gain or loss.

ByHoang TruongUpdated July 11, 2026

FrameworkIAS 16

See it move

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A machine costing €40,000 has accumulated depreciation of €28,000, leaving a carrying amount of €12,000. It sells for €15,000 cash, so proceeds exceed carrying amount by €3,000. The bridge runs €40,000 cost, minus €28,000 accumulated depreciation, plus the €3,000 gain, equals €15,000 sale proceeds.

Where it fits

SubjectFinancial AccountingCoreTopicDouble-Entry & the Bookkeeping CycleCoreTopicAsset Measurement & ValuationCore

The formula

LaTeX

G = S - (C - AD)

Variables

$G$: Gain (or loss, if negative) on disposal (€)
$S$: Sale proceeds (€)
$C$: Original cost of the asset (€)
$A D$: Accumulated depreciation to date of disposal (€)

A positive result is a gain on disposal; a negative result is a loss on disposal.

Check yourself

PracticeCORE

A vehicle cost €26,000 and had accumulated depreciation of €19,000 at the date it was scrapped for €4,000 cash. What is the gain or loss on disposal?

Select an answer to check your understanding.