In the case of abandonment of non-current assets, when is profit or loss recognized?

Profit or loss from the abandonment of non-current assets is recognized at the time of abandonment. This is because the abandonment represents a permanent decision to cease the use of the asset, which indicates that the asset has lost its utility and value to the business. At the moment of abandonment, the carrying amount of the asset is removed from the balance sheet, and any remaining value is recognized as a loss in the income statement.

This approach aligns with the accounting principle that losses must be recognized in the period when they occur, rather than when a decision is made or when the asset is formally disposed of. Thus, recognizing the loss at the time of abandonment allows for a timely reflection of the asset's value on the financial statements and ensures that the financial position of the company accurately reflects its current asset holdings.

It's important to differentiate this from other events listed in the options. A decision to abandon an asset might not result in immediate recognition of profit or loss since it is only a preliminary step; the asset must actually be abandoned for the loss to be recorded. Additionally, revaluation of the asset and sale transactions pertain to different scenarios and accounting treatments that do not apply to abandonment.