CFM23098 - New UK GAAP: FRS 105: financial instruments: financial liabilities: derecognition

For those entities applying FRS 105 with an accounting period beginning on or after 1 January 2016.

Derecognition criteria

A financial liability is removed from the balance sheet (i.e. derecognised) only when it is extinguished, that is, when the obligation specified in the contract is either discharged (for example, when a debt is repaid), cancelled (for example, a debt is released), or expires (for example, statutory limitation prevents a creditor pursuing a debt, or a written option expires without being exercised by the holder).

Accounting treatment

Any difference between the carrying amount of the financial liability which has been derecognised and the consideration paid is recognised in profit or loss.