What is Long-lived assets held for sale?
In short
A long-lived asset is classified as held for sale when management commits to a plan to sell it, it is available for immediate sale, an active search for a buyer has begun and the sale is probable within one year, among other criteria.
Key takeaways
- It is measured at the lower of its carrying amount and fair value less cost to sell.
- It is no longer depreciated, and it is presented separately on the balance sheet.
- If it is a component whose disposal is a strategic shift, it is also reported as a discontinued operation.
Where it's tested
FAR: Property, Plant & Equipment — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A long-lived asset meets the criteria to be classified as held for sale. How is it measured and depreciated?