Consequence of not de-recognising an asset after the sale
What is the consequence of not de-recognising an asset even after the sale of such asset?
When an entity continues to recognise an asset to the extent of its continuing involvement, the entity also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the entity has retained. The associated liability is measured in such a way that the net carrying amount of the transferred asset and the associated liability is the amortised cost of the rights and obligations retained by the entity, if the transferred asset is measured at amortised cost, or equal to the fair value of the rights and obligations retained by the entity when measured on a standalone basis, if the transferred asset is measured at fair value. The entity shall continue to recognise any income arising on the transferred asset to the extent of its continuing involvement and shall recognise any expense incurred on the associated liability.
