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V0928-16 10 March 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · resolución de compraventa

Recognition of asset derecognition loss following termination of sale due to non-payment

A company has requested clarification regarding the accounting treatment of land and an industrial warehouse if monthly instalments are not paid, leading to the termination of the sale agreement. The DGT indicates that if non-payment occurs and the contract is terminated by operation of law, the entity must derecognise the assets and recognise the resulting loss.

The question raised

1. Regarding the expense and imputation period:

The DGT's ruling

If non-payment results in the automatic termination of the sale and purchase agreement with the loss of the amounts paid, the entity must derecognize the land and the industrial warehouse, recognizing the resulting loss. In the event of a subsequent lease, if it is an operating lease, the warehouse would not be an asset for the lessee; if it is a finance lease, the corresponding depreciation criteria shall apply.

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