[TFA] Noncurrent Asset Held for Sale

Question 1

An entity shall classify a noncurrent asset or disposal group as held for sale when

a. The carrying amount of the asset or disposal group is recovered through a sale transaction.
b. The carrying amount of the asset or disposal group is recovered through continuing use.
c. The noncurrent asset or disposal group is abandoned.
d. The noncurrent asset or disposal group is idle or retired from active use.

Answer 1

ANS: a. The carrying amount of the asset or disposal group is recovered through a sale transaction.

Question 2

For the sale of a noncurrent asset to be highly probable, which statement is INCORRECT?

a. Management must be committed to a plan to sell the asset.
b. An active program to locate a buyer and complete the plan must have been initiated.
c. The asset must be actively marketed for sale at a reasonable price in relation to the current fair value.
d. The sale is expected to qualify for recognition as a completed sale within two years from the date of classification of the asset as held for sale.

Answer 2

ANS: d. The sale is expected to qualify for recognition as a completed sale within two years from the date of classification of the asset as held for sale.