Revenue – ifrs 15 handbook

10.7 
Sales outside ordinary activities
Overview
Certain aspects of the standard apply to the sale or transfer of non-financial 
assets – e.g. intangible assets and property, plant and equipment – that are not 
an output of the entity’s ordinary activities.
IAS 16, 38, 40
Under the standard, the guidance on measurement and derecognition applies to 
the transfer of a non-financial asset that is not an output of the entity’s ordinary 
activities, including:
– property, plant and equipment in the scope of IAS 16;
– intangible assets in the scope of IAS 38; and
– investment property in the scope of IAS 40.
IAS 16, 38, 40
When an entity sells or transfers a non-financial asset that is not an output of its 
ordinary activities, it derecognises the asset when control transfers to the recipient, 
using the guidance on transfer of control in the standard (see 
Section 5.1
).
The resulting gain or loss is the difference between the transaction price measured 
under the standard (using the guidance in Step 3 of the model) and the asset’s 
carrying amount. In determining the transaction price (and any subsequent changes 
to the transaction price), an entity considers the guidance on measuring variable 
consideration – including the constraint, the existence of a significant financing 
component, non-cash consideration and consideration payable to a customer (see 
Chapter 3
).
The resulting gain or loss is not presented as revenue. Likewise, any subsequent 
adjustments to the gain or loss – e.g. as a result of changes in the measurement of 
variable consideration – are not presented as revenue.
IFRS 10, IAS 28
When calculating the gain or loss on the sale or transfer of a subsidiary or associate, 
an entity will continue to refer to the guidance in the consolidation standards, 
respectively.
IFRS 16.98–103
If an entity (the seller-lessee) transfers an asset to another entity (the buyer-lessor) 
and then leases it back, then both entities apply the guidance in the revenue 
standard to assess whether the transfer of the asset should be accounted for as 
a sale.
– If the transfer leg qualifies as a sale, then the seller-lessee derecognises the 
asset and calculates any gain or loss under the leases standard. 
– If the transfer leg does not qualify as a sale, then the seller-lessee does not 
derecognise the asset.

---

© 2019 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.
296 | Revenue – IFRS 15 handbook