Sale of non current asset – Calculating the gain or loss of non current asset is one of the most important steps to determine how it will appear in the extracts of the statement of financial performance.
Fortunately, I had derived a simple formula to help students determine it.
Selling price – Cost price + Accumulated Depreciation
Simply, take the selling price of the sold non current asset – Cost price of the sold non current asset + accumulated depreciation of the sold non current asset.
If it is a ‘+’ = Gain on sale of non current asset;
If it is a ‘-‘ = Loss on sale of non current asset