Demolition of assets

Can anybody help me please - I am trying to establish how to treat an asset which we have demolished. I need to confirm how we account for this please. We had an issue in last years audit, which was not material, and it has left a question.

Should the asset be treated as a disposal or should the asset be depreciated up to the point of demolition (i.e. 4 months of the year) and then the remainder of the NBV impaired out to bring the NBV to zero? My question then would be if the latter is the case, how does the GBV and accumulated depreciation/impairment ever get written out? As the asset no longer exists.

We have two assets this year, one which is being replaced and one which is not.

Any help on this would be much appreciated! Thank you in advance
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  • [quote=Anonymous;2002]MJ – I would treat the part demolition of a building as an impairment.

    In my opinion, buildings and land should be treated as separate entities. On demolition of a building I would still recognise the land as an asset in its own right as it’s not likely to magically disappear. I would only remove the land if it was sold/transferred to another party.



    This is an interesting topic.

    My question here is would you continue with the land value as carrying value if building is derecognised? Do you ask external valuers to provide separate valuations for such lands?
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  • [quote=Anonymous;2002]MJ – I would treat the part demolition of a building as an impairment.

    In my opinion, buildings and land should be treated as separate entities. On demolition of a building I would still recognise the land as an asset in its own right as it’s not likely to magically disappear. I would only remove the land if it was sold/transferred to another party.



    This is an interesting topic.

    My question here is would you continue with the land value as carrying value if building is derecognised? Do you ask external valuers to provide separate valuations for such lands?
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