Assets held for sale & discontinued operations

Question 1

In order for an asset to be considered held for sale, it must meet the following conditions:

Answer 1

• must be available for sale in its present condition
• terms of the sale must be usual and customary
• sale must be highly probable

Question 2

A sale is highly probable when:

Answer 2

• mgmt must be committed to a plan to sell the asset
• an active program to lcoate a buyer and complete the plan have been initiated
• the asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value
• the sale should be expected to qualify for recognition as a completed sale within one year
• actions required to complete the plan should indicate that is is unlikely that significant changes to the plan will be made or that the plan will be withdrawn

Question 3

Asset held for sale is measured at:

Answer 3

The lower of:

• Carrying cost
• Fair value - costs to sell