How should a non-current asset disposal be represented in the Statement of Profit or Loss?

When a non-current asset is disposed of, it should be represented in the Statement of Profit or Loss as income (profit) or expense (loss). This reflects the realization of any gain or loss resulting from the sale of the asset, which is essential for accurately portraying the financial performance of the business during the accounting period.

When a non-current asset is sold, the proceeds from the sale are compared to the asset's carrying amount (book value) to determine whether a profit or loss has occurred. If the selling price exceeds the carrying amount, a profit is recognized, contributing positively to the net income for that period. Conversely, if the selling price is less than the carrying amount, a loss is recorded, which negatively impacts net income.

This treatment ensures that stakeholders are informed about how asset disposals have affected the overall profitability of the business, adhering to the principle of providing a complete and transparent view of financial performance. The other options do not accurately capture the nature of a non-current asset disposal transaction in financial reporting.