Week 3

Question 1

assets held for sale must meet certain criteria

Answer 1

1. the asset must be available for immediate sale
2. The terms of the sale must be normal
3. the sale must be highly probable
   a) mgmt has a committed plan
   b) an active plan to fine a buyer
   c) the asset is actiely marketed
   d) the sale should be within a year
   e) low chance of change to the plan

Question 2

measurement of assets held for sale

Answer 2

• measured at lesser of carrying value and fair value less costs to sell
• depreciation stops once classified as held for sale
• a gain can be recognized if fair value less cost to sell are increased

Question 3

discontinued operations must meet certain criteria

Answer 3

• represents a major line of business or region
• part of a single co-ordinated plan to dispose of
• is a subsidiary acquired exclusively with a view to resale

Question 4

discontinued operations measured

Answer 4

• at lesser of the carrying value and the fair value less costs to sell
• measured at component level, not the asset level