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CMA Intermediate · Financial Accounting · Property, Plant and Equipment (AS 10)

In AS 10, how is the date of disposal of an item of PPE determined where it is disposed of by sale?

The date of disposal is determined by applying the criteria in AS 9 for recognising revenue from the sale of goods. It is not the date of negotiation, full cash receipt or year-end, and the consideration receivable is recognised under AS 9 principles as well.

  1. AThe date the buyer's payment is fully received in cash
  2. BThe date the sale agreement is first negotiated
  3. CThe date determined by applying the criteria in AS 9 for recognising revenue from the sale of goodsCorrect
  4. DThe last day of the financial year in which the item is advertised for sale

Explanation

AS 10 says that in determining the date of disposal of an item, an enterprise applies the AS 9 criteria for recognising revenue from the sale of goods. Cash receipt, negotiation or year-end dates are not the test.

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