SFU Co has entered into a contract regarding its head office building whereby it will sell the building on 31 December 2023 to ABC Co and immediately lease it back. The sale contract requires the disposal of the building for its fair value of $30 million and for SFU Co to lease it back for a period of 10 years. The present value of the lease payments at market rates on 31 December 2023 will be $26 million. The market value for a building of this nature has not changed in several years and is unlikely to change in the near future. The building is being depreciated by 5% per annum using the reducing balance method.

Between 30 June 2023 and 30 June 2024, it is anticipated that $2 million will be spent to improve the exterior parking area of the building. There is no legal requirement to improve the parking area. SFU Co, has incorrectly treated this amount as a reduction to the assets carrying amount. At 30 June 2022, the carrying amount of the building, after the deduction of the improvements was $18 million. No other entries have been made in relation to the building for the 30 June 2023 year-end.

Discuss how the sale of the building will be accounted for on 30 December 2023 Please make reference to the IFRS Standard and IAS Standard, Definition, Recognition, Derecognition etc so I can understand